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Fraud Real-Time (RT)

Purpose of this document​

This document provides details at the business, technical (including configuration), and implementation levels for specific features within the ES Loyalty feature set. It specifically addresses a subset of functionality centered on fraud controls.

Standard suite of fraud controls​

ES Loyalty provides a standard suite of fraud controls to prevent or limit the illegitimate acquisition of points or goods through redemptions. These measures are detailed in this section and the next (Fraud Plus). They include automated rules to block excessive earning or burning of points, or to perform other actions (such as suspending an account) when fraudulent behavior is detected.

The following types of fraud may affect a loyalty program:

  • An employee using their points card for customer transactions
  • Delivery of redemption proceeds to false addresses, then appropriating them
  • Adding charges to another member's primary account
  • Coupon abuse
  • Illegitimate points transfers
  • Purchases made with lost or stolen credit cards
  • Sharing card or account information to provide member discounts to ineligible entities
  • Redeeming points, then returning purchases -- note that this activity is not always fraudulent, but may result in a negative account balance
  • Excessive discretionary credits being awarded to a member by an agent

Fraud prevention involves recognizing fraudulent patterns of account activity and freezing affected accounts, as well as limiting the number of points that can be earned or burned, particularly within a given time period.

Daily redemption cap​

Automated rules that limit the number of points that can be redeemed daily, expressed in dollars across all potential purchases. These rules are configured to limit offer fraud and abuse, or to manage budget and points liability at a broader level. The current solution provides only agent audit data (partial, not complete) to a client-hosted Splunk instance on Azure.

Spend-based redemption access​

Program-to-date (PTD) redemption logic that allows redemption privileges only for members who have met a PTD eligible spend threshold. This can be enabled with a modifier that allows certain redemption types to bypass the block.

A client may require members to spend a minimum amount on eligible items before they can redeem. Real-time fraud tracking measures member spending against the threshold to determine whether a redemption request is legitimate and to take appropriate action or display appropriate messaging.

Card linking cap​

Limits how often a new card can be generated and linked to a partner per month. The default setting allows 2 new cards to be linked to a partner. This limitation is applied to the Replace Card function, accessible from the Member page.

Out of province/state redemption block​

Limits the state or province in which an offer can be redeemed to the one where the member is identified as residing in their profile information.

This feature matches the member's state or province of residence with the state or province of a store location and prohibits the member from completing the redemption if the two do not match. It is designed to prevent fraud by blocking redemptions on lost or stolen cards that have been used outside the member's jurisdiction.

Redemption lock​

A real-time account control that lets members instantly block point redemptions to prevent fraud, while maintaining normal non-redemption point activity.

This feature allows any form of point redemption on a member's account to be frozen while the account continues to accrue points through purchases, tier rewards, and other point-accruing activities.

It provides members with an instant on/off switch that blocks all point redemptions across every redemption channel, reducing fraud-related losses with zero impact on any other point movement (transfers, expiry, negative discretionary, and so on).

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