11 Strategies to Mitigate Fraud in Promotions

Promotions are a core strategy for many brands looking to increase sales, acquire new customers and re-engage with existing customers. However, fraudsters are becoming more sophisticated in exploiting promotions for personal gain. This rise in promotional fraud can lead to significant financial losses and harm your brand's reputation.  

Types of Receipt and Promotion Fraud 

Receipt Fraud 

• Modification: Altering information on legitimate receipts. 
• Fabrication: Creating entirely fake receipts. 
• Duplication: Submitting the same receipt multiple times. 
• Out-of-Date Submissions: Using old receipts to claim new promotions. 
• Misleading Submissions: Submitting receipts for unqualified products. 

Promotion Fraud 

• Predictable Codes: Guessing simple promotional codes to gain unauthorised benefits. 
• Action-Based Abuse: Repeating sign-ups and claims using fake information for multiple rewards. 
• Multi-Accounting: Creating multiple accounts with different email addresses to benefit repeatedly from promotions. 
• Malicious returns: claiming the promotional rewards only to immediately return the original purchase or using duplicate receipts to get the money back and the promotion. 

Best Practice Approach to Promotion Fraud Mitigation  

At iGoDirect, we have proven expertise in implementing fraud strategies to protect our clients’ data and maximise promotional efforts. We do this using our fraud detection technology, partnering with clients to implement preventative measures and sharing our industry knowledge every step of the way.  

Some of our best practice protocols include: 

• Using CORE, our proprietary promotions platform: our platform provides fraud checks, including IP address flags for duplicate redemptions.  
• Penetration Testing: Regular cybersecurity penetration testing and risk mitigation.  
• Known Offenders Program: Maintaining a database of known offenders.  
• Optical Character Recognition (OCR) Receipt Technology: Comprehensive checking of receipts using AI OCR technology.  
• Customer Service Verification Checklists: checking for eligible criteria (based on project specifications) such as product code, date of purchase, payment in full, and place of purchase.  
• Regular Review and Reporting: checking verification criteria and customer service project reports to ensure project specifications and rules are followed.  
• 2FA (Two-Factor Authentication): SMS verification via a unique verification code. Integration of 2-factor authentication setup (based on use case appropriateness) provides an additional security measure during the claims process.  
• Product Serial Numbers: If clients can supply serial numbers, we can set up a 'serial number checker' to verify products brought and match them to SKU serial numbers. This can be built into the back-end system.  
• Retailer Invoicing Templates: we have a raft of materials to support clients across various industries in managing their promotions to eradicate fraud.  
• AI Abnormal Pattern Analysis: AI-driven data analytics and insights to drive improved promotional outcomes.  
• Gift Card as a Promotional Reward: Leveraging digital and physical gift cards over EFT to safeguard against cybercriminals accessing customers’ bank details. 

By implementing these strategies, businesses can effectively reduce the risk of receipt and promotion fraud, safeguarding their promotional investments and maintaining the integrity of their loyalty programs. At iGoDirect, we leverage advanced receipt processing technology and fraud detection solutions to help businesses stay ahead of bad actors and get the most out of their promotional efforts.