The Quiet Cost of Perks: Why Promo and Loyalty Fraud Deserve More Attention

Promotions are supposed to bring in customers, not fraud. But in practice, the two often go hand in hand.

That’s what we explored in our recent webinar, Protect the Perks: Stopping Promo Abuse & Loyalty Fraud. And while most fraud teams are already focused on payment risk and account takeovers, promo and loyalty abuse often goes unnoticed.

They might be lower profile, but they still impact revenue, trust, and how effective your customer programs actually are.

Where Fraud Starts

It usually looks harmless: an extra referral, a duplicate account, a second use of a one-time promo code.

But behind the scenes, fraudsters are using tools like email tumbling, disposable inboxes, and account farming to repeatedly access offers meant for first-time buyers or loyal customers. And because they’re working in volume, a few cents per abuse adds up quickly.

According to our recent whitepaper, 81% of coupon abuse comes from serial offenders, people who know exactly how to work the system.

Some of the most common tactics:

• Creating dozens of accounts tied to slight email variations
• Redeeming loyalty points before the real user notices
• Abusing referral bonuses with fake friend signups
• Combining multiple offers that weren’t designed to stack

Most of this goes unnoticed because it doesn’t look like what we think of when we imagine fraud. But it still costs money and corrodes your programs’ values.

From Pattern to Practice: What It Looks Like in the Real World

In the webinar, we talked about how loyalty and promo abuse rarely show up as one big red flag. It’s usually a pattern: lots of little things that slip past traditional fraud filters. For instance, a promo used five times instead of once, dozens of “new” users with email variations, or referral bonuses going to the same device over and over.

These are hard to spot individually. But once you know what to look for, they’re easy to recognize.

That’s exactly what one global quick-service restaurant saw when they dug into their data. Their new user coupons were being claimed by fake accounts, created with lookalike emails that passed standard validation but didn’t belong to real customers.

By applying the same kind of email activity and risk signals we discussed in the session, they were able to identify:

• Which addresses were truly new
• Which were real but inactive
• And which showed high-risk patterns tied to abuse

What started as a vague sense of “something’s off” became a clear, measurable improvement in both fraud reduction and data quality.

Fraud Doesn’t Always Look Like Fraud

Promo and loyalty abuse isn’t usually loud. It’s not always tied to stolen cards or account takeovers, but it still costs you. Left unchecked, small patterns of abuse add up fast, draining resources and skewing performance.

The upside? You don’t need to completely overhaul your stack to address the issue. Just start by looking closer at the signals you already have, like email.

Want to hear how other teams are spotting and stopping promo abuse in real time?

Watch the full webinar for practical insights and examples from the field.