How AI Can Help to Prevent Coupon Fraud

How AI Can Help to Prevent Coupon Fraud

Online coupons and vouchers have changed the way people shop online. Digital coupons, which were rare a few years back, have become an integral part of the eCommerce industry. These vouchers are available on any website or app, no matter what they may be, so you can find them everywhere, even if you’re at an online store or restaurant.

These vouchers are used to increase customer traffic to the company’s website and apps. E-commerce websites use these coupons to increase traffic to their sites and to download their mobile apps. Refer friends to get discounts and make them your permanent customers.

What is a Coupon Fraud?

According to estimates, 90% of consumers use coupons this practice is very popular and has attracted many shady people to it. To fool innocent consumers, fraudsters may use fake coupons. Millions of people have fallen for these fraudulent coupons over the last few years and have placed their personal information at risk. Artificial intelligence technology has made it easier to spot fake coupons.

Coupon scams can affect more than just customers. Coupon scams can sometimes lead to consumers trying to redeem multiple coupons at once. Companies fail to attract more customers and increase their sales as a result.

This article will discuss how AI makes it easier to spot fake coupons.

Also read: Why Do Scammers Ask for Gift Cards?

Common Forms of Coupon Frauds

While coupon codes, coupons, and vouchers have certainly helped increase the revenue of these eCommerce websites, there are also negative aspects such as coupon fraud or voucher fraud. Voucher fraud is when someone or an agency attempts to take advantage of your offers and abuse its policies. They can redeem the voucher multiple time, create fake IDs to access the promos again, and hack the code system. Fraudsters and cybercriminals have been using advanced technology to exploit vouchers and coupon codes.

We have broken down the different types of voucher frauds.

Referral Discounts

Referral discounts can be a great way to get new customers. You can offer promos or discounts to your friend for recommending your application. Some users may be able to take advantage of these discounts by creating multiple accounts and redeeming the offer repeatedly.

Cart Abandonment Voucher

Users might notice a pattern in which they receive promo codes and coupons when they empty their carts but not make the actual purchase. To get as many discounts as possible, some users might do this every time they make purchases.

Apology Vouchers

Online businesses often offer customers coupons and apology vouchers for any complaints about their products or services. To get discounts, some people may abuse this by sending false complaints or calling.

Hacking Into Promo Codes System

Hacking into coupon code systems is another serious form of coupon fraud. A six-digit or four-digit coupon code can only allow for a limited number of combinations. It is easier to find the right combinations if you only log in once.

How to Avoid Coupon Fraud

In the last few years, fake coupons have doubled or tripled in number. This is a growing problem that there are now websites that create content for voucher abusers, and then encourage and support them by teaching them new ways to use coupons. Coupon fraud is a serious problem and is currently causing more than $100 million in annual losses.

It is difficult to manually monitor each voucher when your website is open to large audiences. This requires additional staff that isn’t cost-effective and takes a lot time. How can we protect our online business against fake coupons fraud and preserve the popularity of coupon codes and promo codes? This is where AI comes in.

AI Comes to the Rescue

For many years, AI has played a key role in the detection of online fraud. The sector of fraud detection has seen rapid progress with AI. Iterative intelligence uses large amounts of data to combine them and process specific algorithms. This allows it to draw from patterns and features in previous data and make decisions based on them.

Continuous autonomous anomaly detection is one of the best aspects of AI. Continuous autonomous anomaly detection allows the machines to detect any changes in their pattern of behavior. AI can identify complex patterns and analyze data in milliseconds. Even the most skilled fraudsters can’t withstand the walls AI might build around your online business.

Also read: How To Secure Your Mobile Device Data in 2021?

How AI Helps to Prevent Coupon Frauds

The algorithms for AI were specifically created to protect the website from any type of fraudster behavior. These algorithms are used to track all transactions and activities related to promos and coupons. AI can distinguish between real and fake coupons by looking at the data and finding the pattern. They also find out details about the person during the analysis like:

  • Email
  • Location
  • Phone number
  • IP address
  • Pin code

AI can determine if the coupon being used was genuine or counterfeit by gathering this information. This can allow the individual to save their data for future reference. The algorithm can detect a person using the same ID, number, address or pin code to redeem a coupon he used previously with another account and send it to AI. It will then automatically end the request to use that coupon.

AI is machine learning (ML), which is used to prevent counterfeit coupons fraud. Machine learning employs neural networks, operational statistics, and physics to find hidden information in data. These details are used to make decisions in the next operation.

AI’s Influence on the E-Commerce Industry

A chat box provides all information about the products, offers, and coupons to help sellers and customers build a better relationship. Chat boxes are always available and can usually reply within seconds. This reduces manual labor and eliminates a lot more slack among workers.

AI automates repetitive tasks so you can focus on the parts that need human intervention. This will make your business more efficient and help you grow.


Artificial intelligence is essential for e-commerce. AI has proven itself to be an excellent business partner. It can not only save you time and effort but also protect you against cybercriminals, coupon fraudsters, and other online criminals. We have highlighted the benefits and importance of AI in eCommerce. It is up to you to learn from these facts and make your business more profitable.

Written by
Isla Genesis

Isla Genesis is social media manager of The Tech Trend. She did MBA in marketing and leveraging social media. Isla is also a passionate, writing a upcoming book on marketing stats, travel lover and photographer.

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