Top Trends In Sales Incentive Fraud

It’s no secret that fraud detracts a significant amount from your channel marketing budget, not to mention it affects your brand’s credibility with potential customers. For many, it’s a constant struggle.

According to industry insights, the estimated fraud in an incentive campaign is 2.5% of total claims. With an average of 15,000 claims a week, that’s approximately 375 claims that are fraudulent. Now multiply that by the average amount of a claim, which can range from $100-200. You’re looking at a loss of over $56,000 a week. Annually, that’s over $2.5 million, a huge chunk of your promotional spend that could be put to better use.

Whether you have an internal team that is measuring for fraud, or an automated vendor, taking the necessary steps to eliminate fraud is crucial for program success.

Here are five top trends, we uncovered as practitioners, that your brand should be on the lookout for to detect sales incentive fraud:

1. Recurring Invoice Number

With technological advancements, this type of fraud has become more prevalent. It includes the recycling of the same invoice with a few minor changes, such as spaces or dashes. This tactic is most commonly used with invoice dates.

2. Altered Invoices

This fraud tactic is a variation of the one mentioned above, the difference in that the model and the sales date are swapped for incentives programs which may be more profitable.

3. Submitting Fake Customer Invoices

In this tactic, the sales date, model number, and all other components are within the program parameters. However, the invoice number matches the dealer’s invoicing numbering protocol which is advanced enough to produce an invoice number that has not been used yet. The store invoice is then populated with fake customer information pulled from a phone book, google, etc.

4. Selling to Yourself

This tactic can be a bit of a grey area. In most cases brands allow their sales associates to participate in the rebate if they purchase a product from their store. However, in some instances fraudsters will either pretend to be that sales associate entering on behalf of them or an actual sales associate will file a claim for their rebate, as well as one for an instant and express rebate, on the same purchased product. This means the associate gets paid double, triple or however many times they enter it.

5. Eliminating Fraud for Good

Fraud isn’t an easy thing to spot, especially if you’re running your rebate program in house and using manual auditing. Sure, you could amp up your auditing by potentially hiring more people or focusing more people on that subject. Or you could eliminate fraud for good by going digital.

A true sales incentives solution provider should audit 100% of all claims, and manufacturers that migrate to a vendor with strong fraud detection practices see an average savings of 12% due to non-compliant claims not being paid. Switching over to a digital platform or hiring an automated vendor enables you to allocate your time, resources and money more effectively allowing your brand to spend less time going through millions of claims and more time on your sales incentive program.