Business Analytics


Loyalty Fraud

For Real Rewards, Secure Loyalty Programs

Loyalty programs can stimulate business and reward your best customers. However, there are times when fraudsters, employees and customers may choose to abuse the good intent of a loyalty program. Without proper oversight, analysis and controls these people may rationalize taking advantage of a program.  Loyalty program abuse may go undetected until you’re faced with a crisis damaging to both your reputation and brand.

Is your company exposed?  Take a look at the following situations and see if your loyalty program could be susceptible:

  • You've implemented a loyalty program, and all of a sudden one of your best customers is furious with you. Their account was hacked and their points were taken without their knowledge. What was supposed to be an opportunity to attract and retain good customers has now turned into a PR nightmare, your company's reputation is being hammered in the social media, and you've got a thousand program members calling and sending emails to find out if their balances are intact. To top it all off, you’re on the hook for replacing the point balance that was stolen.
  • A complaint comes in from one of your premium loyalty members who found an anonymous individual selling rewards from your program on one of the online classified sites. This is strictly forbidden under the rules governing your loyalty program. Your customer wants to know if this is an acceptable way to sell his balance too. You assure him that this is not allowed under the rules but he wants to know how you’re going to address it. You’re not sure what to tell him.
  • You’ve been running some reports on your loyalty program database and you’ve noticed a number of recently opened accounts have very large balances, some of them having big reward withdrawals in various names. The accruals appear to be legitimate, but in trying to make contact with some of the members it becomes obvious that the address and phone number information is fake. You’re not sure whether or not to be concerned.

Clark Consulting partners with companies to:

  • establish a Loyalty Compliance function at your company to protect the program and your reputation
  • clearly understand the risks inherent in your program and how to minimize them
  • define your data requirements to support consistent investigative endeavours
  • deploy mitigation strategies to minimize risk, maximize compliance and take appropriate action against the perpetrators

Contact us at  This e-mail address is being protected from spambots. You need JavaScript enabled to view it for an assessment of your Loyalty Program.