This post is sponsored by Epsilon.
Fraud is increasingly becoming top of mind for loyalty marketers, as 72% of loyalty programmes have experienced fraud-related issues.
As more efforts are focused on helping to protect membersâ€™ valuable rewards, it is important all members of your organisation are aligned when implementing a fraud solution. Consider these five tactics to help prevent loyalty fraud.
Build awareness and train employees so everyone is familiar with and can identify common examples of fraud, such as the creation of fake accounts, compromised account takeovers, as well as your processes for combating it. Management should clearly communicate fraud detection and fraud policies with employees. Not only does it help to raise the level of awareness and importance of mitigating fraud, but it also helps to set expectations with employees on the repercussions if they are found guilty of loyalty fraud.
Logging both customer and employee loyalty programme activity is essential. This allows you to detect fraudulent behaviour before it spins out of control. But using reports to monitor programme behaviour is only going to catch it after it happens. Consider applying algorithm-based analytic tracking methods and real-time technology to keep a close eye on behaviour, and be proactive about the potential for fraudulent activity before it happens.
Within your loyalty platform, make sure you have the ability to track both recent behaviour and changes to the member profile, historical point transactions or redemption history. Respond to each and every change within a memberâ€™s account to determine “atypical” behaviour and always send confirmation communications when key profile elements are updated – including email address, password and physical address.
Ensure key safety features like multi-layer authentication and complex password modules are integrated into your loyalty programme. Implementing the ability to intercept redemption events in real time is a best practice too, should your system or employees detect or suspect fraud.
If you see something suspicious within your programme, quickly respond and alert programme management, IT, security and HR, if appropriate. Sending loyalty members regular and automated communications when their address or password is changed is essential in helping to protect your programme against fraud.
Download our recent e-book to learn more on what you need to know to combat loyalty programme fraud.
The writer is Tad Fordyce, senior VP, loyalty marketing, Epsilon.