One of the most important things about running a successful B2B company is customer loyalty. Unlike B2C, where customers may switch brands over minor inconveniences or price differences, B2B relationships typically involve larger financial commitments, longer sales cycles, and greater interdependence between businesses, which is why a B2B loyalty program can be crucial to getting long-term customers on board.
But nothing in the business world is safe from fraud. In a study undertaken in 2023 – revealed in the MRC’s Global Payments and Fraud Report – over 22% of merchants have encountered incidences of loyalty fraud. Understanding the nuances of this type of fraud, then, is essential if you’re running a B2B company that relies on its loyalty programs to formulate successful, lucrative relationships that last.
Loyalty Fraud: Explained
Before we get into how to detect loyalty fraud, then, it’s first important to explain what loyalty fraud is. While instances can be quite nuanced, loyalty fraud generally refers to the unauthorised use or manipulation of a company’s loyalty program by fraudsters looking to gain undue rewards, discounts, or benefits.
In the B2B landscape, this could involve ‘Account Takeover’ – or ATO – which occurs when fraudsters gain unauthorised access to a loyalty account using stolen credentials. It could also be carried out by fraudsters submitting false claims, such as fictitious transactions or returns, or through insiders with access to loyalty systems.
What is the Impact?
When this occurs, the impact on B2B companies can be massive. For starters, loyalty fraud often results in direct financial losses, which can then erode the profitability of loyalty programs in the first place.
As well as this, investigating fraudulent claims and rectifying the issues takes time and resources, which ultimately disrupts normal operations and takes the attention away from core business activities, such as nurturing client relationships or expanding market share.
It’s also worth noting that B2B loyalty programs are built on trust. Any kind of fraud can harm the relationship legitimate clients have with businesses, especially if a trusted partner is implicated. So not only can the direct result of fraud lead to financial loss, but it can also erode the trust that you’ve built with other customers, and undo years of hard work that it’s taken for you to acquire them.
How to Detect Loyalty Fraud
Thankfully, since loyalty fraud has become even more publicised in recent years, so too have the tools and practices to counteract it. In 2025, for instance, you have the ability to utilise modern fraud prevention management tools– those that include artificial intelligence as a cyber shield – to greatly improve your fraud detection accuracy.
These will help you to continuously monitor multiple endpoints to detect suspicious behaviour, while also minimising false positives that might otherwise frustrate genuine customers.
As well as this, it’s important for your business to understand that, without having access to customer accounts, it’s far harder to commit loyalty fraud – which is why the login endpoint is recognised as the first line of defence.
With this in mind, MFA, intelligent CAPTCHA, and biometric verification can be invaluable when it comes to reducing unauthorised access attempts, with advanced behavioural analytics also critical to flag and block potential threats before they result in ATO.
Speaking of your customers, it’s also important to note that loyalty fraud prevention starts with customer education. If you’re running a B2B company, it’s your job to communicate with customers and help them understand their loyalty accounts carry real monetary value. By providing your clients with clear security guidelines – including the use of MFA – and information on how to check their points, you’ll be providing them with the tools to detect and combat fraud themselves, which essentially means there are two lines of defence against fraudsters, rather than one.
Conclusion
Loyalty fraud is not going away any time soon, and if your B2B organisation hasn’t dealt with it yet, then the chances are you will in the future. It’s important, then, to arm yourself with all the advanced tools and follow the practices listed above. If you do this, you’ll be in a far better position not just to detect and fight fraud when it occurs, but to keep your customers onside and ensure their loyalty is not shaken as a result.
