- Promo abuse = Exploiting promotional offers, referral programs, or discounts beyond intended terms
- Common patterns: multi-accounting for new user discounts, self-referral, coupon stacking, loyalty point manipulation
- 20-30% of promo budgets lost to abuse
- Detect via device fingerprinting: same device/payment method across "different" accounts
- Prevent with delayed rewards, phone verification, clawback provisions
Exploiting promotional offers beyond their intended terms.
Definition
Promo abuse (or promotion abuse) occurs when individuals exploit promotional offers, discounts, referral programs, or incentives in ways that violate the spirit or letter of the terms.
Common Abuse Patterns
Multi-Accounting
Creating multiple accounts to claim one-per-customer offers:
- New user discounts (repeated)
- Free trials (repeated)
- Referral bonuses (self-referral)
- Limited-time offers (hoarding)
Referral Fraud
Exploiting referral programs:
- Self-referral with fake accounts
- Referral farms (organized fake signups)
- Collusion (referrer pays referee split)
- Bot-generated referrals
Coupon Abuse
| Type | Description |
|---|
| Stacking | Combining coupons not intended to stack |
| Sharing restricted codes | Posting single-use codes publicly |
| Code generation | Guessing/generating valid coupon codes |
| Expired code exploitation | Technical bypass of expiration |
Loyalty/Rewards Abuse
| Type | Description |
|---|
| Point manipulation | Exploiting earning glitches |
| Transfer abuse | Moving points to cash-out accounts |
| Return-and-keep points | Return item, keep earned points |
| Status gaming | Artificial activity for tier status |
Scale of the Problem
| Statistic | Source |
|---|
| 20-30% of promo budgets lost to abuse | Industry estimates |
| Referral fraud accounts for 5-15% of referral payouts | Various |
| Multi-accounting affects 10-15% of e-commerce promos | Industry data |
Detection Signals
Account-Level
| Signal | Risk Level |
|---|
| Device fingerprint seen on multiple accounts | 🔴 High |
| Same payment method across accounts | 🔴 High |
| Similar email patterns (john1@, john2@, john3@) | ⚠️ Medium |
| Same IP for new accounts | ⚠️ Medium |
| Address variations (123 Main St, 123 Main Street) | ⚠️ Medium |
Behavior-Level
| Signal | Risk Level |
|---|
| Only transacts with promos/discounts | 🔴 High |
| Refers many accounts that never purchase | 🔴 High |
| Creates account, uses promo, disappears | ⚠️ Medium |
| Attempts invalid/expired codes repeatedly | ⚠️ Medium |
Prevention Strategies
Technical Controls
- Device fingerprinting – Link accounts by device
- Payment method linking – One promo per payment method
- Phone verification – Unique phone per account
- Address normalization – Detect variations
Program Design
- Delayed rewards – Pay referral after first purchase/retention
- Minimum purchase requirements – Prevent pure promo orders
- Caps per customer – Explicit limits
- Tiered rewards – Better rewards for better customers
- Clawback provisions – Recover abuse-gained rewards
Monitoring
- Promo redemption dashboards – Spot unusual patterns
- Referral quality tracking – Conversion rate of referrals
- Device cluster analysis – Identify abuse rings
Response Actions
| Severity | Action |
|---|
| Suspected | Monitor, flag for review |
| Confirmed (minor) | Revoke promo, warning |
| Confirmed (major) | Account ban, clawback rewards |
| Organized ring | Legal action, industry sharing |