How To Run A Fraud-Resistant Rebate Program

Rebate Fraud Prevention: How To Ensure Your Business Doesn’t Process Fraudulent Rebate Submissions

Rebate fraud is more common than many companies who wish to institute a rebate program realize. Not only can rebate fraud cost your company time, money, and resources, it also deprives you of the opportunity to collect real, raw, and high-quality customer data.

That’s right, a rebate submission is a reliable avenue for collecting customer and sales partner data. Data your customers or sales partners submit on their own free will. Data you can use internally to improve marketing and sales efforts, not to mention future promotional and incentive programs.

In order to help your company avoid the major losses associated with rebate fraud, you must understand how it happens and take measures to prevent or detect potential cases of it.

Methods For Preventing and Detecting Rebate Fraud

When it comes to preventing and detecting rebate fraud, there are a few things you can do during the planning and processing steps of your rebate program.

Submission Form Counterfeit Prevention Techniques

While attempts at rebate fraud today are quite advanced, don’t count out the fraudsters who might go for the low hanging fruit and counterfeit forms.

Printed rebate forms are easy to duplicate but you can prevent this by printing in two colors, using a tint, adding a watermark, adding a specific sequential number or using other anti-counterfeiting techniques.

*State that reproduction of a rebate form will be considered a violation of copyright statutes and will void the offer altogether.

Clearly Present Rebate Program Rules and Fraud Statutes

Deter fraudsters from attempting rebate fraud (or customers from making ignorant mistakes when submitting claims) by clearly disclosing the rules of your promotion and legal repercussions of committing rebate fraud.

Rebate program rules that can prevent fraud include:

• Specify the exact purchasing requirements for rebate eligibility. (Brand, product, size, etc.)
• Specify an expiration date for your program (including postmark date).
• Voice that a rebate will only be issued to the name of the requester.
• State that a rebate proof or purchase must be acquired through the purchase of the product.
• Set forth that rebate forms must be hand-written and that no printed name or address labels will be accepted.

Require A Serial Number

A serial number (or license number) is a unique piece of information. So unique that if a claim comes in with an inaccurate serial number or if more than one claim comes in with the same serial number, the rebate can be easily flagged. By requiring participants to include a serial number on their rebate claim, you will be able to catch and reject fraudulent claims.

*Keep in mind, an incorrect serial number entry doesn’t necessarily mean rebate fraud. Your manufacturing partner, customers and sales partners are only human. It’s possible they may have simply made a mistake. But either way, you’ll want to make sure these errors are caught and corrected before you approve the rebate.

Collect Store Invoices

Store invoices are one of the most accurate and effective ways to capture transaction data. A store invoice can help you to detect suspicious claims based on conflicting store invoice formats or invoice serial numbers that don’t match up with claimed invoices that were submitted.

*We also recommend capturing salesperson, part number, or item description (or vehicle information for our automotive aftermarket clients).

Look For Signs of Fraud In The Mailing Address

When processing rebate claims, pay extra attention to the mailing address. Believe it or not, the mailing address included on a participant’s rebate claim can be what exposes a fraudulent claim.

Signs of fraud can include:

• Computer generated address labels
• Multiple submissions mailed from the same address
• Multiple submissions requesting rebates be sent to the same address
• Customers requesting the rebate be sent to a P.O Box
• Postmark on the envelope differs from the return address
• Envelopes with the same handwriting

*By capturing the customer’s mailing address from invoices, you can measure a customer’s geographic location as opposed to having the postal code of the store on claims submitted. This can be helpful when it comes to flagging certain locations for suspicious claims.

Sales representatives

Most sales reps know who their top retailers are, so their intel is very important when it comes to approving or denying a rebate. Having a sales representative’s insight can go a long way when it comes to detecting fraudulent claims.

Consider Switching To A Technology Driven, Digital Auditing Process

The manual auditing technique that many companies used to use to process paper, mail-in rebate submissions is quickly becoming a thing of the past. Not only is the process of manually auditing rebate claims laborious and time-intensive, but it also makes you more vulnerable to rebate fraud.

When rebate submissions are received and processed digitally, it allows for a mass number of submissions to be reviewed against known (and programmed) fraud patterns or trends.

And your customers probably won’t mind taking the process digital either.

Consider Outsourcing Rebate Processing and Fulfillment

Finally, one of the best ways to avoid rebate fraud is to work with an incentive partner who has experience in preventing and detecting it.

When you work with a rebate processing and fulfillment company they’ll be able to help you implement various rebate fraud prevention and detection tactics. Plus, handing off the processing of your rebate program will alleviate the immense administrative burden it puts on your team, take away the guesswork that comes with rebate processing, and save your company from losing money on rebates that were not fairly earned.

It’s time to ensure your organization is combating rebate fraud effectively and reaching its full potential–let us help. From determining what pieces of data should be required on your claim to cross-checking submitted customer data for consistency, we’ll crack down on rebate fraud and help your company achieve success with the rebate program.

For more on how to plan and execute a successful rebate program, we invite you to download our guide. Learn exactly what goes into designing and running not just a fraud-resistant rebate program, but a rebate program that will allow you to drive results.