If you have heard of the Free iPods website, then you know what incentivized traffic is and how it is generated. People receive points or a reward of some sort for participating in an offer listed on the incentive website. In my case, I am marketing a product on an affiliate network using "incentivized traffic". The response seems great at first, many orders, however the level of fraud is very high. Many of the orders are placed with stolen credit card information, and are refunded/charged back. Oddly, the transactions do not appear fraudulent. The IP is from the USA, the address passes AVS check and even the correct "card code" number is entered. The orders are not coming from china, india or some other third world country. My question to anyone else who is promoting a product or service on an affiliate network with incentivized traffic - is there an effective way to automatically weed out fraudulent orders?
Not that I know of, other than switching to a different affiliate network, or specifying that your offer cannot be incentivized. The incentive business is rife with fraud...I had considered opening an incentive site until I realized just how bad it was.
A lot of companies still rely on incentivized traffic, and there are well-known brand-names being promoted on "paid for offer" sites...so I am sure there are some things I can do to help mitigate fraud. Setting AVS settings more aggressively seems to have helped, because it is easier to dispute chargebacks when you can show positive AVS validation. Beyond that, creative ideas are necessary.
Hate to say it but you need to include fraud in business plan. Accountants hate me for saying it. Due to the distance selling you need to allow % for this. DO what you can to minimize it, but plan for the worst and hope for the best. I did a deal XMas time and was giving away free Playstions. Not all turned up. A million reasons why. didn't loose any money but could have.
Hey, i have 1 site in my sig, have a look. we implemented solutions of third parties to fight fraud and 24/7 monitor of members. basically you need to use the correct affiliate networks, then only deal with good incentive sites who fight fraud as well. then, you need to install some tools to fight fraud, i.e proxy detection tools and such. i bet many of your IP's are from Asia.... you just don't know it cause they are masked.
Here's a some info on an upcoming program that will detect and prevent incentivized sales. The project is called clickstomp and should launch february 1st 2008. clickstomp.com
Personally if you can't manage the fraud you get from incentivized traffic then you should stop your program from getting this sort of traffic by mentioning it in your programs TOS or something. You could also try another network as some networks are more better than others when it comes to rooting out fraudulent traffic and publishers/affiliates.
What we've done to dramatically reduce the fraudulent orders is to require people to register using their "real" email, i.e. not a throwaway email from hotmail, yahoo or gmail. Almost all the fraudulent accounts had one of those three emails. Once we did that, things cleared up a lot...but it may be an inconvenience to legitimate customers. A lot of the IPs are in fact masked/spoofed or whatever. They resolve back to US IPs, but the people behind them are actually in asia. What kind of application can detect the true IP of the user, and not the proxy IP? Is that even possible?