Birthdays always stink of fraud — I will never admit my actual age and all of my fake birthdays that I use to get promotions. You best believe it, if I need that 15% off, I will create multiple accounts and say it is my birthday to get discounts and gifts.
Businesses enable birthday promotions, as a nice way to reward their customers with a gift on a day they are likely to spend. It is truly a brilliant marketing move. So, your next question might be, BotNot, why is birthday-friendly fraud such a big deal? I get gifts, while the brand gets a sale — it seems like a win-win situation, but in reality, it is a heavily used tactic for fraud.
Here’s a use case for a company that we advised. They had a 140% growth MoM of their new members, in which ~90% of them had “birthdays” on that specific month. When looking at the data, we saw a decline in Average Order Value for new members vs. recurring members. When digging even more deeply, we noticed that these new members used birthday promo codes to get x% off their total purchase. So, I am not a statistician, but what is the likelihood of, let’s say, 100 people all having the same birthday? I won’t go over the entire Birthday Paradox as we know the larger the group of people, the higher probability a pair shares a birthday. However, it does not pass the fraud sniff test.
Here’s why — birthday promotion codes are effortless to get. There’s no gatekeeping around membership and membership perks. There’s genuinely no way to validate if it’s your actual birthday or not (including bypassing tools like SheerID). Maybe if you tell a restaurant it’s your birthday for a cake, they will ask to see your ID, but in e-commerce, validation is complex. These companies want higher membership growth and will take these sign-ups as a positive impact on their growth. There are some pros and cons to that approach.
To all my e-commerce managers, realistically, raise your hand if you cleaned out or checked out who is signing up for membership birthday coupons. When we looked deeper into the data of the company we advised for, we noticed it was a few networks of individuals. They were all buying the same product and using the membership perks to unlock discounts or special access to some experiences. Signing up for multiple accounts is not hard — it’s worth it if you get a discount. I tend to be a more frugal shopper, so I have no loyalty to a brand/marketplace, only to a promo code.
Let’s go back to the core problem. Now, you are reporting to whomever that your growth is more steady and increasing. It is misleading, as you are growth numbers are inflated by fake and likely inactive accounts. In addition, you are prioritizing the sale over new members vs. retaining your current members. If you know (like me) you have a frugal shopper, prioritize the coupon for that user vs. having them bypass your system to make a new account. New accounts skew and tend to cost your company more money. You will have to understand WHO this account is and how this impacted your analytics, growth, and forecasting.
Here’s where BotNot comes into play as we tell you who is doing these actions — we already know you are busy daily and your work life. You do not need more on your plate. We’re here to do the tedious, mundane work like understanding the group of people doing birthday-friendly fraud. We want to increase your legitimate KPIs vs. allowing bad actors to skew your metrics. We’ve identified that 30% of bad actors use coupons nefariously on one of our partner sites. We’ve also helped reduce the cost of marketing by 10% by removing these bad actors from marketing and ESPs — friendly tip, don’t send emails/texts to bad actors. It just costs you money and ruins your marketing campaign metrics.
If you are more curious about my favorite birthday membership coupons (curious to see their friendly fraud…):
- Starbucks: Starbucks Rewards membership gets you a birthday reward. And what is super cool about Starbucks’s birthday freebies is that you can choose almost anything from the menu.
- Chipotle: Join Chipotle Rewards to get a free birthday surprise.
- Sephora: You guessed it! Sign up for Sephora’s Beauty Insider Rewards Program to get a free product on your birthday.
- Nike: Become a Nike member to receive 10% off on select items during your birthday month.
- Target: Join Target Circle to enjoy 15% off a future purchase on the day of your birthday.
It is a prominent marketing tactic with good intentions, as people should get gifts on their birthdays. Unfortunately, it has opened up another attractive avenue for those pesky bad actors!