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Preventing Loyalty Program Fraud and Abuse Merchant Best Practices

Learn how to protect your loyalty program from fraud and abuse with effective practices that secure accounts, prevent reward misuse, and safeguard points.<br><br>Visit Here For More Information: https://merchant.loyalnsave.com/blog/loyalty-program-fraud/?utm_source=PPT&utm_medium=slideserve&utm_campaign=Loyalty Program Fraud&utm_id=offpage

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Preventing Loyalty Program Fraud and Abuse Merchant Best Practices

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  1. Preventing Loyalty Program Fraud and Abuse: Merchant Best Practices

  2. Introduction Loyalty program fraud systematically attacks your rewards ecosystem through malicious activity targeting coupons, discounts, and perks illegitimately. Fraudsters exploit every vulnerability: fake sign-ups, account takeovers, bot-driven promotions, and illegitimate redemptions of stolen rewards. Your loyalty rewards are digital currency with real monetary value, making them prime targets for theft.

  3. 04 03 05 02 06 01 07 How Does Loyalty Fraud Affect Your Business? Revenue Loss Inaccurate Analytics Data Brand Damage Reduction in Participation Operational Costs Discrepancy in Reconciliation Inventory Shrinkage • Fraud poisons data, forcing optimization for thieves’ business. You exchange real value for stolen, criminal rewards. • Drained customers lose trust due to your security failures. • Insecure programs drive disengagement; customers won't invest there. • Fraudulent redemptions drain inventory, causing stock-outs for customers. • Financial reporting breaks as point liabilities mismatch reality. • Teams waste hours on manual fraud, not growth.

  4. Types of Loyalty Program Fraud & How They Will Happen Account Takeover Fraud Fake Account Creation Transaction Manipulation Fraudulent Receipt Uploads Referral Collusion Coupon Code Abuse • Bots create fake identities, exploiting bonuses, draining budgets, corrupting data. • Bots scrape discount codes, causing revenue loss; fraud prevention essential. Criminals breach member accounts, draining rewards through stolen credentials rapidly. • Forged receipts enable criminals to claim rewards, undermining receipt-scanning promotions. • Fake account networks exploit referrals, draining points and corrupting marketing data. • Fraudsters exploit policies, manipulating returns to illegitimately earn points. 01 02 03 04 05 06

  5. 1 4 2 5 3 6 Ban Suspicious Customers from Store Regular Report Audit LNS enables immediate bans, stopping threats and securing program perimeter. Audit loyalty reports regularly to detect hidden fraud patterns. 9 BEST PRACTICES TO PREVENT LOYALTY PROGRAM FRAUD Setting Notifications Up Enhance Customer Account Security Configure LNS alerts for real-time detection of abnormal purchase activity. Verify identities, fingerprint devices, monitor IPs, and block bots. Tighten Redemption Controls Safeguard Loyalty Point Accrual Enforce strict, tiered redemption rules to reduce loyalty fraud incentives. Cap point earnings and verify customer identity at checkout.

  6. CONTACT US Phone +1 845-719-3550 Email Info@loyalnsave.com Website https://merchant.loyalnsave.com/ Location 146 Rock Hill Dr, Rock Hill, NY 12775 6

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