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Your loyalty may have loopholes your customers may exploit to earn rewards, despite your elaborate set of rules.
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McDonald’s hashed out their new digital loyalty system in 2021.
As per the scheme, customers could rack up 100 points for every dollar spent. Furthermore, they could redeem these points post earning 1500 points. The catch? The points can’t be shared, expire within six months, and can be redeemed as one reward per order.
One would think such safeguards would be enough to deter avid burger eaters. 🍔 Instead, smart consumers started turning up at McDonald's outlets and placing several different orders to redeem their reward points quickly.
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If it isn’t obvious yet, your customers could exploit one tiny loophole in your rewards program, putting your entire system in disarray. Good thing you can prevent such a situation in the first place with Capillary. 😉
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When you merge your loyalty program with Capillary, you unlock effective ways to trace and deal with loyalty fraudsters.
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For instance, our robust fraud detection system allows you to detect unnatural customer behaviors in several ways. These include:
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- Vintage/ visit or the ratio of the number of days since the first transaction date and the number of times the customer visits the store. A smaller ratio indicates suspicious consumer behavior.
- Transaction hours count/day or if the customer exceeds a set number of transactions per day.
- Transaction amount limit or when customers spend more than the set thresholds.
- Top customer percentile, which sorts customers based on their order of lifetime purchase, wherein customers within the lower percentile have a higher probability of committing fraud.
- Transaction in different zones on the same day.
- Visits and latency wherein the customer exceeds the visit threshold and makes fewer transactions compared to the number of times they visit the store.
- Spike in transaction amounts (by over 10X the average value).
- Redemption rate or the ratio of the points redeemed to points awarded, wherein a higher value indicates fraudulent activity.
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Once detected, these customers can be auto-tagged and you can decide the next course of action. The best part? All of this is automated & can be managed by simple rules. You can set rules to automate the next steps.
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- Exclude fraudsters from your reporting
- Stop the issuance of vouchers
- Block point issuance and redemptions
- Mark those transactions outlier, and much, much more.
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Looking for more information about our fraud prevention mechanisms? Connect with a Capillary partner today!
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