Automated fraud prevention mechanisms

ReferralCandy's fraud prevention measures built into the referral detection system

Adam avatar
Written by Adam
Updated over a week ago

There are a few fraud prevention mechanisms that ReferralCandy has built into its referral detection system:

1. Existing customers are not eligible to be referred by other Advocates

ReferralCandy distinguishes between a first-time customer and a repeat customer. Only first-time customers can be referred. Repeat customers will not be considered referrals. For example, John refers Mary. Our system detects this and John gets the reward. Subsequently, another customer, Tim sends his referral link to Mary and Mary makes a purchase through that referral link. The app detects this but does not consider this a referral as Mary is already an existing customer.

Note: The caveat is that for existing customers that ReferralCandy doesn't know about (i.e. customers that had made a purchase before you installed ReferralCandy), they will be considered first-time customers.

2. Checks to see if the Advocate is trying to self-refer

If it is detected that the Advocate is trying to refer themselves, ReferralCandy will not award the referral to the Advocate. This is determined based on information obtained from the referred friend's invoice (such as first name, last name, and email address).

3. Preventing Advocates from gaming the system to get rewards

To prevent the situation where an Advocate is able to game the system to get disproportionately large rewards (e.g. getting a $10 cash reward for referring a friend who makes a $1 purchase at your store), you are able to set a minimum purchase amount for purchases to count towards rewards.

4. Sharing on coupon-sharing sites

If an Advocate shares their referral code on popular coupon-sharing sites, ReferralCandy can detect that and inform you in Fraud Center. You can then ban the Advocate and disqualify any referrals they have made. When you ban an Advocate, all referred purchases within the review period will be automatically disqualified.

Note: Banning an Advocate is irreversible. Once an Advocate is banned, they will not be able to refer friends and their pending rewards will be disqualified.

5. Tools to allow you to easily handle referral fraud

Automated fraud prevention mechanisms are able to mitigate, but not totally prevent all potential cases of fraud. Thus, besides the automated fraud prevention mechanisms, ReferralCandy has features to allow you to handle and prevent referral fraud that the automated systems were not able to handle:

  • You are able to define a referred purchase review period, to give you time to verify, review and disqualify possible fraudulent referred purchases

  • You are able to ban Advocates from your referral program. Banned advocates will not receive any further rewards for your referral program

6. What to do when referral fraud is detected

If, despite all the measures we have put in place, you believe that referral fraud has happened - please carry out the following steps:

  • Ban the Advocate - See the instructions and details here

  • If that is not an option or you have any concerns, please contact us.

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