Here are fraud prevention mechanisms built into the referral detection system:
1. Existing customers can't be referred
ReferralCandy distinguishes between a first-time customer and a repeat customer. Only first-time customers can be referred, and repeat customers won't be considered referrals. For example, John refers Mary. Mary makes a referred purchase and John gets a reward. Then, Tim sends his referral link to Mary. Mary makes another purchase through that referral link. The system won't consider it a referral as Mary is already an existing customer.
Note: Existing customers from before you installed ReferralCandy will be recognized as first-time customers by the system.
2. Checks to see if the advocate is trying to self-refer
The system detects if an advocate is trying to refer themselves, and won't award the referral to the advocate. This is determined based on information obtained from the referred friend's invoice, such as the first name, last name, and email address.
3. Preventing advocates from gaming the system to get rewards
In cases where an advocate tries 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), you can set a minimum purchase amount that they must meet for a purchase to count toward a reward.
4. Sharing on coupon-sharing sites
When an advocate posts their code on popular coupon-sharing sites, they are marked as suspicious in Fraud Center. You can ban the advocate to disqualify any referrals they made that are still within the review period.
Important: Banning an advocate is irreversible. Once a contact is banned, you can't unban them. Banned contacts won't be able to refer friends, and any pending rewards are disqualified. Learn more
5. Tools to handle referral fraud
Automated fraud prevention mechanisms can mitigate but not totally prevent all potential cases of fraud. Aside from the automated fraud prevention mechanisms, ReferralCandy has features that allow you to handle and prevent referral fraud:
Define a referred purchase review period to give you time to verify, review, and disqualify possible fraudulent referred purchases
Ban advocates from your referral program to disqualify them from referring again
Need more help? If you're experiencing a suspicious or fraudulent referral behavior that can't be addressed by ReferralCandy's tools and automated mechanisms, contact us.
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