Fraudulent has become the utmost concern for every business nowadays. You can not deny that there are people who do fraud when it comes to getting benefits. As we are moving ahead with digitization, the more risk it possesses, regarding fraudulent. Therefore, it is essential to learn the Referral fraud prevention mechanisms to prevent yourself from being trapped.
Referral fraud prevention mechanisms are
Verify your customers
We encounter many frauds because it has become effortless to create an account. If you want to have only genuine people on your referral program, you should find a way to make sure only actual people qualify to be part of your referral program. Account numbers, Mobile numbers, Combination of particular information; Family name, Given the name, and birth date. You can do this process either on your own or automatically, whether daily or real-time. What you have to do is here to create rules wherein whenever the information being input doesn't match, it will be denied. But this wouldn't work for programs that allow anyone to join, so skip this and let's go to number two.
Intervening manually
Let's move forward to learn at a bit higher level. It would be best if you had authorized program administrators to decide whether a referral gets approved or not. Let them decide whether you should give a reward. And this administrator should also check and make sure that a referrer and the person who got referred are eligible for the reward because the referrer should be a real existing customer. He has to follow all the steps correctly. This method works well when used as soon as the project launches. It also makes you capable of screening those who join your program and prevent fraud, misuse, and scam at the very beginning.
Rules for referrals
Creating rules for referrals is the most effective way to prevent fraud. Ensure you add account verification and many more things that could be checked before you approve or deny a referral. As a business person, You only want only those who are eligible to receive rewards, so here are some other things you should consider:
- A referral could get denied if the referred and referrer have the same parent account number.
- A referral could get denied when both persons, meaning referrer and referred, have the same shipping address for the delivery.
- A referral could get denied if a purchase had been made before the referral was sent.
- A referral could get denied when the instructions weren't followed properly, or the purchase was not right..
- A referral could get denied when either isn't an eligible customer type, like postpaid vs. prepaid, savings account vs. Checking acct, and others.
- A referral should get denied if the referrer was not a customer unless you accept anyone in your program (which isn't safe at all). A referral should get denied if the referred person is already your existing customer.
Limit your rewards
By limiting the number(amount) of rewards a person can earn will help you to control scams from happening. Apart from that, there are many other ways to limit the reward a person can avail of. For instance, some clients limit it to $399.99 to make sure they won't have to issue W-9 Tax forms and avoid remitting taxes for the program's people. Some also limit it to only $250, so referrers won't create multiple referrals but still can earn as per the limit. What your aim here is to do here is to avoid misusing your referral program while giving people good incentives.
A return period
One good way to keep your program's fraudulent acts is to create a delay in approving a customer to become eligible. In other words, the referred person has to be a customer for a given set of time or should purchase at least once to receive the reward, and this goes to the referrer as well. This assures you that they could be relied on and would stick around for a longer period.
Don't be in a hurry to approve conversions.
InviteReferrals provide a mechanism through which you do not need to approve the conversion when it occurs. You can keep it pending until you verify the authenticity of the conversion. If you want, you can check the authenticity manually. Otherwise, you can hit Conversion Confirm API to verify the customers.
Prevent fraud emails
Many customers are there who use different apps and fraud email generators to take the benefit; therefore, it is crucial to have a mechanism that ensures the authenticity of the mail. InviteReferrals fraud prevention mechanism ensures there is no space for fraud emails to get more fake conversions.
These are the most effective ways of preventing and detecting it. Make sure you follow these ways, especially when you're ready for referrals.
How to configure InviteReferrals referral fraud mechanism
Users can simply configure it by manually setting up a limit for every conversion. They have to adjust the time and conversion limit and once the limit got set, the mechanism will keep a check on the limit and warn users if the referral fraud mechanism found any suspicious activity.
How InviteReferrals prevents your business from fraud in Referrals
- Firstly, the user needs to limit the expected number of referrals within a certain time frame.
- Secondly, if anyone tried to do a suspicious activity or any fraud, it will automatically prevent that person from making more referrals.
- Lastly, It will prevent fraud by keeping a check on campaign id, referrer id, and the IP address. If the referrer uses fake methods and crosses the limit, then it will automatically block the referrer, and there will be no conversion from his end. Even from that moment, the referrer will not be a part of this campaign until the admin unblocks him.