By Doriel Abrahams, Principal Technologist
Fast food holds an undeniable appeal as a quick and comforting option, a significant advantage for quick-service restaurants (QSRs). But all too often, consumers are setting up multiple accounts to take advantage of promotions they’re not entitled to or to get many bites at a promotion apple that’s meant to be one per customer.
Until recently, many QSRs have been reluctant to get serious about shutting down this kind of fraud because they fear alienating good customers with bad experiences. But with shifting business priorities and richer options for tailoring experience to customers, that attitude has changed, and there are lessons every business should learn from QSRs, regardless of industry.
Minor Fraud, Major Losses
I’ve been in this industry long enough that I often assume I’m immune to surprises, but this shocked me: It’s common in the QSR industry for as many as 10% of sign-up attempts to be made by users who already have an account, using the same name, and a similar email pattern to the existing account. So maybe I have doriel@, but this time, I’ll do doriel1@, then doriel2@, and so on.
Moreover, a significant portion of these attempts – between 2-4% – occur without any effort to disguise this duplicity, often using the same device. Even worse, many places allow users to delete their accounts and sign up again using all the same details! As a fraud fighter, this level of permissibility irks me.
Dual Account Dilemmas
Even users with zero tech expertise and no professional understanding of fraud can still be pretty sneaky. Within promotion abuse, they’ll sometimes try to play both sides to gain discounts on two accounts.
If you’re a company that offers a refer-a-friend program, you might try to incentivize both existing customers to refer their friends and also new customers to take the step to sign up. With programs that are especially permissive and easy to monetize, as many as 5% of sign-ups are reported to be referral abuse. Even when steps are taken to make it less attractive (e.g., the referring party doesn’t get anything until the new account has made a purchase), it’s still reported to represent 1-2% of sign-ups.
Don’t underestimate the potential cost of ignoring this kind of abuse. Once, the marketing department of a customer I work with came to me when they set up a referral campaign. We put the proper protections in place and tracked what those protections were saving them — and it came to a whopping $1.5 million in revenue that would have otherwise have been abused discounts. This is not pocket change.
More than that, protecting the validity of sign-ups led to an accurate understanding of campaign success, user growth and customer base, which is a long-term investment in the health of the business.
Insights from QSR Experiences
QSRs are learning a lot about account abuses, what they cost a business, and what can be done to benefit the business and rebalance the relationship with customers. There are some lessons that I’ve been very struck by recently that I think every industry in digital commerce should be taking note of:
- Account abuse is expensive: Recognizing the financial toll of account abuse compels organizations to take it seriously once they analyze its impact.
- Account abuse shows that small steps can have a significant impact: Doriel1 should not be getting a free pass, so don’t give it to him.
- Account abuse touches the whole business: Addressing account abuse requires a holistic approach involving every customer touchpoint and department to enhance marketing accuracy and reduce support burdens.
- Account abuse can mean you don’t know your own business: Understanding the true scale of account abuse reveals essential insights into a company’s user base and performance metrics, justifying the investment in accurate data.
- Account abuse is a nudge to re-evaluate your relationship with customers: The customer is… almost always right, maybe? Reassessing customer relationships involves discerning the value of user actions and guiding customer behavior toward mutual long-term benefits.
- Account abuse can be solved with investment in insight and thoughtful decisions: Solving account abuse hinges on investing in comprehensive insights and making informed decisions to balance customer satisfaction with business needs.
Understanding Every Account
QSRs used to be reticent about stopping all these account abuses because of the fear of annoying good customers, even those who sometimes cheat. I’m seeing that changing for a couple of reasons.
First, business priorities have shifted from focusing on growth at all costs to emphasizing efficiency and sustainability, and account abuse flies in the face of that. It’s expensive for the business financially, it gains nothing for the company, it trains customers to have problematic assumptions about what they ought to expect from merchants, and it confuses a company’s understanding of its own numbers.
Second, businesses now have more options about what they can do about abuse. Once you completely understand your customers, how often they’re attempting abuse, and how valuable their legitimate business is to your company, you can make more nuanced decisions.
And just like customers want their meal just so, with all the trimmings they want — and don’t want — companies can adjust their policies according to how trustworthy a user really is in the context of their business. Once you find the perfect recipe, you’ll get the results that are just right for you.
