The Fight Against Fraud in Marketing Promotions

Key Takeaways

• Threat of Fraud in Marketing: Things like coupon abuse and loyalty program fraud are increasingly undermining promotional strategies and costing businesses hundreds of millions annually. This not only significantly impacts the bottom line but also erodes trust.
• The Role of SafeToTrust: AtData’s SafeToTrust utilizes advanced email intelligence to help identify fraudulent activity, ensuring promotions reach legitimate customers. This solution enhances the integrity of marketing efforts, improves ROI, and protects brand reputation.
• Targeting Systematic Abuse: SafeToTrust focuses on more intentional fraud schemes rather than targeting individual consumers using temporary or disposable emails for privacy. By distinguishing between casual misuse, or “gaming the system”, and more significant fraud, the solution aims to create a fair marketplace for all customers.

Fraud has become a serious threat to businesses that rely on promotions and loyalty programs to engage customers. It can erode trust, waste resources, and ultimately damage your bottom line. From coupon abuse to fake accounts, fraudsters are finding new ways to exploit marketing strategies.

SafeToTrust from AtData offers a solution — by leveraging email address intelligence and our leading activity network, SafeToTrust helps businesses identify potential fraud before it can have an impact. This real-time tool ensures that your promotions, referral programs, trial offers, and the like, reach real customers, protecting your revenue and improving the ROI of your marketing efforts.

The Increasing Need for Fraud Prevention for Marketing Programs

Fraud is becoming increasingly democratized, with more everyday consumers finding ways to “game the system” in pursuit of savings. While many individuals may not realize their actions are potentially fraudulent — often seeing themselves as simply taking advantage of available promotions rather than engaging in dishonest behavior — it’s important to identify and differentiate between occasional misuse and more systematic abuse.

The primary risk to businesses comes from losses caused by those who deliberately manipulate promotional systems. Research shows that businesses lose between $300 and $600 million annually due to coupon fraud, and the retail sector faces staggering losses of around $100 billion each year from return fraud, bots, and coupon stacking.

One major concern lies in the misuse of promotional offers through the use of fake or creation of multiple email accounts. This tactic not only allows fraudsters to bypass security measures but also drains resources and undermines the value of marketing efforts. While some may casually use disposable emails to claim a coupon or two, SafeToTrust is designed to target larger, more systematic offenders — those who exploit promotions on a broader scale.

These fraudsters often create many duplicate accounts to exploit promotional offers repeatedly, draining resources and undermining the integrity of marketing strategies. Identifying and stopping these fraud networks is key to ensuring legitimate customers receive the benefits intended for them. When fake accounts manipulate loyalty programs or sign-up bonuses, real customers often suffer from limited offers or increased prices, leading to disengagement and long-term damage to your brand’s reputation.

By identifying email addresses used in these fraudulent practices, we can create a fairer marketplace for all consumers.

How SafeToTrust Works Across Key Industries

A report from Juniper Research found that eCommerce fraud losses were expected to exceed $48 billion globally in 2023, with loyalty fraud being a key area exploited. This growing trend highlights fraud’s increased complexity and frequency, particularly in industries that rely on promotions and subscriptions. These tactics, meant to drive customer engagement, often become a target for fraudsters who exploit the system, which drains resources, undermines the value of offers, and erodes data integrity for future decisioning.

Tools like AtData’s SafeToTrust help businesses address these issues by monitoring email activity signals across a broad network, analyzing domain risk, and validating email addresses in real time, preventing fraudulent accounts from exploiting promotions. For example:

• Retailers and Restaurants

  Fraud through coupon and promo abuse is increasingly threatening quick service restaurants (QSRs) and retailers. Recent reports indicate that coupon abuse attempts in the QSR industry are surging.

  Fraudsters can generate and use hundreds of email accounts to exploit promotional offers repeatedly. For instance, a chain may see multiple accounts created on their app in rapid succession, all trying to redeem the same new account signup bonus, inflating costs and jeopardizing profitability.

  SafeToTrust addresses these challenges with advanced machine learning that monitors engagement and detects patterns, allowing the chain to block these accounts until they can escalate for further review.

• Subscription-Based Businesses

  Subscription models, especially those that offer free trials or discounted pricing for new users, are particularly vulnerable to fraud from repeat offenders or synthetic identities. Almost 60% of subscription merchants have seen an increase in account takeovers, and almost a quarter noticed a significant increase. And around 50% of subscription merchants said policy abuse (inclusive of promo abuse) is a top business risk and growing concern.

  A streaming service might face issues, for example, when individuals create multiple accounts using fake identities to take advantage of free trial offers repeatedly. These users could sign up with different email addresses to binge-watch content indefinitely without ever paying for a subscription.

  SafeToTrust addresses these vulnerabilities through advanced fraud prevention strategies. So, if the system detects this is a brand new email address with no activity history, those accounts can be flagged for further review. Similarly, if a user’s email or domain is associated with known fraudulent activity, you can block access before the account is even activated. By ensuring that only legitimate customers access subscription offers, SafeToTrust protects the integrity of the subscription model.

• Online Communities

  In online communities, discount abuse and the presence of fake profiles can greatly undermine customer experience and damage profit margins. This issue is especially prevalent in industries like gaming, where in 2023, the U.S. gaming sector had one of the highest suspected digital fraud rates at 10.9%, a 9% increase from the previous year.

  A gaming platform might see an influx of accounts created in rapid succession, all claiming promotional in-game currency. In fact, 1 in 10 transactions in the gaming industry associated with online account creation in 2023 were suspected to be digital fraud. These fake profiles disrupt fairness, as fraudsters manipulate the system to gain advantages without honestly contributing to the community.

  SafeToTrust addresses this by identifying anomalies, helping to block fraudulent users before they access discounts or promotions. And by preventing fake accounts from infiltrating the community fosters trust among users, creating a secure and engaging environment where real participants can interact without disruption.

Why SafeToTrust?

Fraud related to marketing promotions is a growing threat that can damage your bottom line, waste resources, and erode customer trust. SafeToTrust actively prevents it by using AtData’s advanced email address intelligence, so your promotions and loyalty programs are only accessed by real customers, protecting revenue while preserving the integrity of your offers.

SafeToTrust seamlessly integrates, enhancing your ability to identify fraud in real time. This means better engagement with legitimate customers, and a higher return on your investment. You’re not just reducing losses — you’re safeguarding your brand’s reputation and building stronger relationships with the customers who matter most.

Ready to protect your marketing from fraud so your efforts are focused on real customers?
Learn more about SafeToTrust and contact us to get started.