Read This and Reduce Incentives Fraud Exposure

Show the folks in finance a sample set of your sales incentives data and chances are good they are going to see some things that don't sit perfectly well with them: invoice numbers curiously out of sequence, unusual purchases such as five sets of tires for one customer and the like.

Incentive program compliance may not be keeping anyone awake at night in sales ops or marketing, but there is a high likelihood that your shareholders and the people in finance would feel better knowing where all the money goes at the end of a promotional program.

Reducing payment of fraudulent claims is one of those situations where an ounce of prevention is worth many pounds of cure.

It's so important to be aware of the impact of fraud on your promotion spend simply because it has a huge impact. Fraud is costly – and in today's competitive business environment, smart companies are always looking for ways to save money and improve their bottom line. Think about it this way: if you control the company's channel marketing or promotional spend, every dollar you save from fraud is a dollar you can dedicate towards a higher value reward in your program or rewarding an additional person. This can mean the difference between a good sales incentive program and a great sales incentive program. In turn, channel marketing people can keep their sales associates happy and the associates continue to support their business.

When it comes to fraud with incentives, you don't know what you don't know – there is no large association that mandates rebate fulfillment companies to report on monthly fraud claims or set industry benchmarks.    As such, it is extremely important to take it upon yourself to ensure you have visibility into emerging fraud threats.

As technology is advancing, people are becoming more innovative in their tactics of committing fraud. Therefore, it is important for our fraud detection technologies to keep up with these changes. On the other side, we also don't want to overcomplicate the process for the honest users by adding too many rules aimed at controlling fraud. The burden falls upon the brand (or their fulfillment provider, such as us) to constantly be updating techniques that detect and combat emerging fraud threats. This way, you can spend less time and money auditing the claims internally. Reducing fraudulent payouts gives you additional money in your budget to dedicate towards communication of the program and allows you to dedicate higher value rewards to more people. Knowing that the highest possible compliance is baked right in to your execution helps you eliminate obstacles from your terms and conditions that associates feel they might need to overcome and don't feel are worth it.

At 360insights, we audit 100% of the claims we process, but if you're not a client of ours, here are 3 important things you can start doing to protect your spend:

• For starters, having to submit an invoice against each claim is critical otherwise you can't be certain it's a valid claim.
• You need to review your data - look for claims out of pattern in your current data.  Does this claim make sense? E.g. - does it make sense for an individual to go out and buy five sets of tires?
• Call sales associates and even call consumers to confirm information. If a claim seems off to you, there's very often a good reason for that so it is great to have somebody follow up with a phone call to clarify the details of the claim. 

In conclusion: it's really important to stay ahead of the curve when it comes to fraud - it seems like fraudsters are always coming up with something new. We detect these and share with all of our clients.

For more resources on reducing incentive fraud, have a look at our auditor's checklist or download our free e-book Fraud: The Most Overlooked Opportunity.  These resources will help you to make sure your company is taking the most important steps to detect and prevent fraud so that fraud stops eating into your promotional spend.

A lifelong technology entrepreneur, Jason Atkins is the founder and CEO of 360insights.  360insights is the world's first Channel Success Platform, allowing brands to run spiffs, rebates, co-op/MDF, and sell-through allowances all processed and paid with 100% audit and powerful analytics to predict what to do next. For more information, visit: http://www.360insights.com.