Top 3 Frauds in Receipt Marketing

Staying ahead of receipt fraud in expense management and customer loyalty programs.

Many creative companies have adopted Receipt Marketing as a low-cost tactic to attract customers and persuade them to return to their business. Following a purchase, a customer uses their receipt to gain rewards, and thus, are motivated to continue purchasing.

But, these cost-effective, resourceful campaigns face a common conundrum:

Receipt Validation

Or, in other words, verifying the authenticity of submitted receipts.

In this post, we will outline the 3 most frequent types of fraudulent methods that we’ve come across, as well as Taggun’s approach in combating them.

1. Distribution

Sharing a single digital receipt over the internet, often using social media sites.

This appears to be the most rampant type of fraud – and fortunately, it is also the easiest to detect. As a single digital copy is being shared for submission, Taggun can reliably identify if the same copy of the receipt has been submitted more than once by checking the digital signature (MD hash) of each receipt file.

2. Duplication

Using digital replicas derived from a single physical receipt.

Customers may try to submit duplicate digital copies of the same physical receipt file to claim their reward more than once. This is trickier to detect, however, Taggun cleverly extracts the receipt number or other unique numbers that are available on each receipt. These numbers can then be used to check if the receipt has been claimed before.

3. Alteration

The deceptive modification of a receipt file.

This is relatively rare – which again, is fortunate, as we are currently unsure if AI can accurately detect if a receipt has been altered. So, to deter this type of fraud, we advise clients to counter it by building a report of abnormal user profiles or activities for auditing purposes, e.g., multiple claims from a single address.

Is it better protection to have human-based management and supervision?

In general, incorporating some form of human intervention is expected to decrease fraud. Yet, a trade-off naturally arises:

Risk-of-Fraud vs. Receipt-Processing-Time

Employing human-minds over artificial algorithms dramatically slows down the process, and so it becomes clear that…  

The small risk of Fraud is a risk worth taking.

People have a tendency to place higher value on the needs and happiness of their present self compared to their future self. A phenomenon known as “temporal discounting” in behavioural economics, or, in everyday lingo it may be dubbed “impatience”.

Hence, real-time receipt scanning improves customer engagement – as value exchange is instant.

All in all…

Receipt promotions are fun and imaginative for marketers. But, they can be put off by the annoying possibility of fraud.

Fortunately, Taggun’s AI receipt OCR system helps to overcome this challenge. Incorporating receipt processing for loyalty programs offers a powerful tool for increasing customer loyalty and maximising lifetime value through data-driven marketing strategies. Taggun's smart receipt transcription engine, powered by the best OCR for receipts, secures and streamlines customer interactions in your loyalty programs.

We are excited to build something awesome with you 🚀

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