At this point, everybody has already figured out promo abuse and its consequences to the impacted services. But what sets it apart from actual legitimate user behavior? There must be a difference between promo abuse vs legitimate user behavior.
Companies and businesses want to protect their services from financial and reputation losses, and that’s fine. However, in order to do that, they must draw a line between what is a fraud and what is a real, genuine activity.
Misjudging either side as the other can backfire on businesses’ attempts to protect their services. Let’s learn about how to differentiate between promotion abuse and user behavior that is 100% real and legitimate.
Defining Promo Abuse vs Legitimate User Behavior
Promotion abuse is a fraud technique in which a user (or a group of people) tries to exploit any sort of promotion benefits in the services. They are taking more bonuses and deals than what they are supposedly allowed.
On the other hand, legitimate user behavior is how a user usually acts or engages with the services and their promotions. They are interested in deals, use promotions to buy an item, and follow the rules as they are written.
So by using these definitions, what’s the difference between them? To make them really set apart, we can differentiate them by these criteria:
- The ownership. Promo abuse fraud often involves having multiple accounts by using fake or stolen identities. Legitimate users only have one account created using their real identity.
- The action. Fraudsters abuse promotions by claiming all the profitable deals and rewards. Meanwhile, normal users only take promotions that interest them and ignore the ones that they don’t feel like claiming.
- The behavior. Fraudsters tend to spoof their device and bypass e-fence to get every promotion and deal as much as possible. Typically, any legit users would be casually shopping with their location and device visible.
Risks of Misjudging Promo Abuse vs Legitimate User Behavior
Knowing the difference between them matters to avoid the risks of flagging legitimate user behavior as fraudulent. What kind of risks await businesses for wrongfully misjudging both of them? There are three risks:
Financial Losses and Revenue Leakage
Misjudging promo abuse alone could damage so much of a business financially. The promotional marketing that was meant to gauge legitimate users’ interests fell into the hands of fraudsters who already have so much.
If this keeps happening, businesses will lose a lot of revenue and profit. Not to mention that these bad actors can duplicate accounts, which means they can take even more giveaways, rewards, coupons, and anything else.
Damaged Customer Relationship
Imagine being a legitimate user, following the rules and using the services as usual. Then one day, they are being flagged for committing promo abuse fraud. This can risk the trust they have put in the business.
What’s worse, the flagging system fails to detect fraudsters who commit the abuse. These seemingly unjustified restrictions will drive many users away and keep fraudsters continuing to eat away at all the promotions and deals.
Pressure on Secure Payment Systems
Fear of misflagging legitimate user behavior and evolving fraudsters pushes businesses to look for a stronger security system. This could mean one thing: businesses need more budget to spend on security alone.
This pressure isn’t just coming from fraudsters alone but also from growing regulatory compliance as well. Companies are being required to follow standards like PCI DSS (Payment Card Industry Data Security Standard) to avoid penalties.
Identifying Promo Abuse vs Legitimate User Behavior
Now that there is a clear line between fraudsters and real users, how do companies ensure that line remains to be seen? Identifying them can be done by implementing a promo abuse detection system and enforcing strict rules.
Clear Terms & Rules
First and foremost, it is an obligation for businesses to develop clear terms & rules to identify fraudsters amongst users. These rules can outline them by determining the usage limits, the criteria to claim promotions, and what the limitations are for claiming rewards.
By having robust, clear terms & rules, companies can discourage fraudsters from committing promo abuse. Rules can be broken, but enforcing them will help businesses to identify which users break the law and thus can be easily prohibited from continuing to do so.
Identity Verification
For the further identifier, the best method is by applying stronger identity verification. Here are several tools that can help identify fraudsters:
- Utilize stronger KYC (know your customer) verification. Businesses can combine electronic-based KYC and MFA to detect synthetic IDs being used for fraud. This system can also ensure login is done only by legitimate users.
- Leverage device fingerprinting to create a unique identifier. These can help track fraudsters who utilize spoofing and bot usage, as well as ensure legitimate users have their real identity protected.
- Identify promo abuse fraud by using the device integrity system. If a promo abuser tampers with their device or uses VPNs, this system can rule them out. Legitimate users will stay with the services since they are genuine.
Also Read: Securing Discounts: Prevent Promo Abuse with Verification
Monitoring Transactions
In order to identify and detect any signs of fraudulent activities involving promotional abuse, businesses have to continue to monitor every user transaction. Here’s how to do it:
- Implement a continuous real-time monitoring system. This system can help manage risks from fraudsters taking promotions by giving early warnings to the businesses.
- Leverage AI to detect early anomalous user behavior. By using AI, companies can set up behavioral analytics that can detect anomaly patterns like constant reward claims and unfamiliar payment methods.
Policies to Manage Promo Abuse vs Legitimate User Behavior
Since prevention is better than cure, having promo abuse detection is not enough. Companies and businesses also need promo abuse prevention by having policies that can help manage fraudulent activities, for example:
Limit Risky Incentives
Promotional incentives are good, but they can encourage fraudsters if there is no limitation. Therefore, limit these risky incentives to make sure legitimate users can claim them. For example, incentives are only for users who have already used the services for 30 days.
Train Teams Regularly
Since companies and businesses don’t work alone, they have to make sure the teams who manage the services are trained well. Educate them on the risk of organizing promotion campaigns and how to manage promotional abuse by using promo abuse prevention tools.
For example, Keypaz helps companies to identify promotional abuse with its device fingerprinting and real-time rule orchestration. This tool can help teams to set customer identity journeys, separating genuine users from fraud.
In conclusion, knowing the difference between promo abuse vs legitimate user behavior saves companies from trouble. Implement Keypaz to separate fraudsters from legitimate users now!