Loyalty Punchcard Fraud

10 replies
If a business were to offer "achievement" loyalty cards, how do they make sure people don't punch in all the holes at home?

For example, if a pizza place offers a free family-size pizza after 6 punches (6 purchases), how do they know the person didn't go home and do 5 of them? More so when they have 15+ employees and can't possibly know when each customer comes in.

For "run-out" loyalty cards there's no problem (examples are that they get 25% off for every punch/visit), since the customer doesn't want it to run out. But what about achievement cards?
#fraud #loyalty #punchcard
  • Profile picture of the author Dennis Gaskill
    The businesses I've seen use punch cards use a special punch with a one-of-a-kind shape, or at least a shape that most people won't have, like you'll find here:

    Hand Punches, Punch Card and Hand Metal Punches, Slot - Badge - ID

    Or, they use a unique rubber stamp that most won't have.
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    • Profile picture of the author Dizain
      Originally Posted by Dennis Gaskill View Post

      The businesses I've seen use punch cards use a special punch with a one-of-a-kind shape, or at least a shape that most people won't have
      That's exactly how they do it in metra trains too. Different shapes every shift and everyday.
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  • Profile picture of the author slb1900
    That makes sense. Thanks Dennis.
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  • Profile picture of the author KimboJim
    Aside from the unique shapes, you can also have your employees initial near each punch hole.
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  • Profile picture of the author wakeforce139
    Hi, This is a very genuine problem, What i have been offering my clients is basically a Saas software where it allows you to design and print the loyalty cards with a barcode and it has to be scanned to typed in to validify the purchase.

    Customer can also login to check their "points" online.
    Let me know if you would like more information.
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  • Profile picture of the author jherewini
    We used to use punch card loyalty programs until just recently we had the same issue which is why we shifted to a new program, its free to join, no monthly maintenance fees and comes with 250 cards and a mobile app.

    And integrated into our point of sales system real nicely without interruption to our core business
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  • Profile picture of the author AmericanMuscleTA
    Originally Posted by Dennis Gaskill View Post

    The businesses I've seen use punch cards use a special punch with a one-of-a-kind shape, or at least a shape that most people won't have, like you'll find here:

    Hand Punches, Punch Card and Hand Metal Punches, Slot - Badge - ID

    Or, they use a unique rubber stamp that most won't have.
    I see a lot of businesses use the one-of-a-kind shapes.

    The local sushi joint I frequent has loyalty cards. They just write something in Japanese. I'm sure some people copy it, but most people are going to be honest.

    It's like offering a 200% money back guarantee. Most people will be honest and then you'll get the few sleezeballs who just want to double their money.

    You just need to take into account there are a few people who will abuse the system.
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  • Profile picture of the author rawandrew
    I love using physical loyalty cards in my family business - a bakery chain of stores. It increased sales by 200% to 300% in some stores. I use a stamp for the loyalty card and it has nine spots that can be stamped.

    The advantage of the physical card is that everybody can use it and they also lose them all the time. But they still come back because of the loyalty card.

    The problem that I am facing is not customer fraud but employee fraud. It is really easy for them to stamp the card and get the bonus purchase to sell at retail price. You'll have to keep your eyes on the employees and have a mechanism to make sure the cards turned in are real.

    What I do is from time to time to contact some of the people who used my loyalty card and ask them if they really used it. Also, if a card is brand new I know it is a fake. A card that stays in a walled for up to two weeks has some wear and tear.
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    • This is what we use at our restaurant. We also double punch sometimes right in front of the customer. Something mentioned on this forum. The closer it is to being fully punched the more the feel like the want to complete it. 20140413_133650.jpg

      The one that is one punch from being complete is akin to, buy one get one free.
      Too address fake cards and employee theft, ha ha. Only if we could be so lucky. We can barely get our employees to remember to hand them out. Also, very few people dine alone, most people who brings the card in brings an additional.
      20140413_133732.jpg

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  • Profile picture of the author NewParadigm
    mobile app so you have them opt in, give them period updates and "double punch" deals etc..
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