Making the Veterans badge a decoration will protect it because it is illegal under section 197 of the Army Act 1955 to use these to pretend to be a member of the armed forces. (This act will be superseded by the Armed Forces Act 2006 in November.)
The act makes wearing any military decoration, badge, wound stripe or emblem without authority a criminal offense. It is also illegal to wear a replica "as to be calculated to deceive", and to falsely represent yourself as someone entitled to wear any such award.
Making the Veterans Badge a military decoration will give it protection under these said acts and illegal for non veterans to wear it and use it to secure favor such as discounts given to true veterans
https://petition.parliament.uk/petitions/110201