Reseller Fraud Is Costing You More Than Just Your Ad Budget - Know Why?
The pandemic brought a massive shift in the behavior of a shopper. When the entire world was inside their homes, eCommerce brands became the talk of the town. Every retailer wants to be seen online to reach their desired target audience. During this time, the trend of resellers also took a high pace.
A reseller is a person who buys the product in bulk from a wholesaler or retailer and sells it to their own audience usually at a profit.
Reselling became a popular option for people for its seamless process and no upfront investment requirement. However, seeing an industry growing the fraudsters also don’t take a setback.
Reseller Fraud in The Rise
There have been some cases where the resellers are found to be using the discounts the wholesalers provide for the customers on online purchases. The reseller avails these D2C discounts which an end customer is only eligible to make bulk purchases online, instead of buying from the wholesaler. This eventually ruptures the retail chain of the advertiser.
The reseller abuses these discounts by employing bots and buys the product from the retailer in bulk at a lower price. Later they resell them at a higher margin to gain benefits and increase their revenue.
Real Case: One of the Leading FMCG Brands
The brand launched a program for one of its most demanding products. They planned to offer a discount of 15% off to their users. As the limit was to order only one quantity per order, it was detected that there were multiple orders of the same product in a day
We further analyzed and detected:
The same users were fraudulently making repeat purchases or purchasing bulk orders using the discounts available for retail consumers.
Coupons and vouchers were manipulated and abused using scamming practices.
Offers usually only valid for first-time users were used repeatedly by multiple email ids/phone numbers.
What Brand Lose Due to Reseller Fraud?
1. Friction in Genuine Users: Due to bulk purchases by resellers, the genuine users see a stock out and lose interest in buying from the brand. And when they see the same product available with a third party selling at an inflated price, it directly impacts the consumer’s loyalty to the brand. The users think that the brand doesn’t care about the consumer’s needs and safety which further impacts the brand’s image.
2. Skewed Analytics: Not just the brand image, but the entire growth of the brand is impacted due to reseller fraud. Due to vigorous reseller activities, the brand doesn’t understand the real demand for the product in the market and how much to invest for scaling. This results in a discrepancy in the supply chain of the retailer.
mFilterIt’s Way to Combat Reseller Fraud
Resellers commit this fraud as organic users and, in some cases, the orders are placed by traffic coming from paid sources/publishers. As a result, the publisher enjoys the payout on the order placed and the resellers take advantage of high discounts on their purchases and an additional commission from the publisher.
At mFilterIt, we use the capabilities of AI, ML, and data science to detect these discrepancies in the order placed. We do a deep check on the traffic sources based on information like:
Customer mobile number
Coupon code used
Ordered product information – Popular/Unpopular items
Further, with our CRM API, we marked the order statuses as Clean or Fraud in the CRM itself. This eventually gives clarity to the retailer to deliver only clean orders placed by genuine users.
Stop The Reseller Abuse
Reseller abuse not only costs the marketer its revenue, but it also punishes the loyal consumers. Due to resellers placing bulk orders, the prices inflate, and the consumers have to pay more for the same product. Therefore, taking strict action against the reseller must be a priority for the retailers.
To ensure that the consumers and brand image are not impacted due to reseller abuse, the retailers must partner with a holistic ad traffic validation solution. The traffic verification suite must be capable of not only weeding out invalid traffic but also reducing the friction amongst consumers and improving the overall customer experience.
Validate and protect your brand from reseller abuse with our advanced solutions. Contact our experts today at email@example.com or +91-981 0310 660.