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Promo Fraud: How It Works and How to Stop It

Security, Offer Management Platform, Promotion Fraud, Smart Offers

by Nick DeStefano July 29, 2020

Spotting suspicious devices and user behavior to save money for your business.

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Many brands use extra benefits to loyal customers as a simple but effective strategy to both keep those customers in the brand ecosystem and attract new buyers. From offering discounts on your first purchase, to tiered percentages-off loyalty programs, to free gifts with qualifying purchases — promotions are an ingrained part of brand strategies. Yet what is supposedly a sign of legitimate customers is taken advantage of by bad actors gaming the system.   

Promo fraud can range from something as innocuous as customers doubling profiles to gain additional discounts and coupon codes, to sophisticated referral networks that may cost a brand thousands of dollars in bonuses. Though these mini-losses are a quick and positive sales boost tactic that is good for businesses in the long run, perpetual promo fraud is death by a thousand cuts — small discounts with no benefit for the brand can undoubtedly take its toll on profit margins.

How Can Brands Prevent Promo Fraud?

Great promotions and coupons are some of the most important and simple tools that brands can use to foster customer loyalty, as well as differentiate their brand. Fraud is complex and confusing for the marketers too busy trying to build their business, yet these business leaders can reinforce their platform’s ability to detect and block promo fraud.

Take Control

RevTrax’s Offer Management Platform makes it easy to run smarter, more secure offers and drive more value from digital marketing efforts across multiple channels. Plus, offers are guaranteed to go to a specific targeted audience.

Fraudsters take advantage of the normally inconvenient customer experience of searching for and applying various offer codes when they check out. Traditionally static, unsecure offer codes tied to single values that can easily be copied and shared dozens of times are what significantly hurt margins. 

Dynamic coupon codes backed by validation API allow for hyper-personalization and tracking that will automatically be applied to the customer’s shopping cart, whether they are an existing or new user. 

The key to combat fraud is for these offers to be single-use, secure, scalable, compatible with any POS system.

Precise Measurement

The OMP and patented security suite puts a measurable approach back into a brand’s hands by tracking conversion from digital engagement to both in-store and online sales. Not only does it offer a level of security, it allows brands to gain actionable insights about the consumer journey across digital channels. It also connects granular information about an audience demographic, media channel, and other key attributes to each conversion for a total picture of customer journeys.

The key is user-level security to ensure that an individual user can only access an offer a certain amount of times from an approved customer experience flow; the ability to measure bad engagement or over-redemption by a consumer and create a global scoring system across clients is a big step in blocking bad actors.

Results

This is a time of incredible uncertainty and financial strain. Brands will offer promotional materials as a way to boost sales, while consumers will more than likely look to take advantage of the cost savings associated with them. But at the same time, bad actors will try to simultaneously use that uncertainty to take advantage of both. With millions of dollars and consumer financial wellbeing at stake, each should be protected at all costs since there aren't many companies which can withstand this type of pervasive fraud.

RevTrax lets the end results speak for themselves:

  • In H1 2020, our security measures saved over $1.5 million of coupon fraud for a Fortune 500 client.
  • In H1 2020, our security measures blocked over 980,000 known fraudulent users and bad actors for the same client.

 

We've helped hundreds of brands over the past decade protect their offers and block fraudulent users. If you'd like to learn how RevTrax can help improve your offer security without hindering loyal customer experiences, contact us to speak to a specialist.


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