Is it really a slippery slope with discounts? I offer them on another forum and I find yes I do get some bad apples, but, I use multiple fraud checking systems, and some common sense based on what type of site they have or don't have.. I recently had some low speed spammers on my server.. I noticed they did not update their dns, and informed them they had to update their dns, then checked their actual files, and noticed two accounts, with two names and two different ip's were using the same files, checked a fraud checking service, and others noted they were spammers. I terminated both accounts without a refund. I use fraud record, This service is based on details from actual hosts that monitor and report things themselves.
You have to also realize that there are a thousand other web hosts just like you that are doing the same thing, the question is what can you do better? If you sit here and can not come up with an answer after a week or a month or two, perhaps you are in the wrong business.
Getting rich quick on Web Hosting or Web Design is a lost cause business, in my small town there are about 10-20 small web design firms.
You can under cut your competition, you can offer dollar web hosting, and you can even overload your servers and put cloud linux to keep it going.. but you still have to cover costs, and those costs add up.