Detecting affiliate fraud is important for merchants because fraudulent clicks can waste advertising budgets and reduce customer acquisition costs. Fraudsters use techniques such as cookie stuffing and app install attribution fraud (also known as attribution hacking) to steal commissions from unsuspecting affiliate partners. This guide gives merchants a better understanding of the ways that fraudsters operate and the impact of their activity on the bottom line. It also outlines methods for protecting against fraudsters and preventing payment fraud.
The best way to identify affiliate fraud is to keep an eye on your data and look for patterns that don’t make sense. Some examples of fraud red flags include:
High conversion rates
When an affiliate’s conversion rate is much higher than average, it could indicate that they’re using deceptive tactics to generate sales. This includes fraudulent traffic sources such as shady regions and masked IP addresses.
It’s not uncommon for customers to file a chargeback after a purchase, but when the same buyer files multiple disputes within a short timeframe, this is often a sign that something suspicious is going on.
The good news is that detecting fraud is easier than ever with the right tools and partner management systems. By monitoring your data closely and staying in touch with your affiliates, you can spot anomalies in their transactions before it’s too late.