Case study: marketplace promo abuse reduced with device identity

Promo-abuse is a silent killer of the growing marketplaces for digital goods. While coupon codes and referral programs are intended to get faithful customers, they tend to attract professional fraudsters instead.

If not checked, this kind of abuse can drain marketing budgets, distort the data of users and create a shady setting for honest consumers. For a major regional market, this turned into an issue of multi-million dollars that traditional security couldn't deal with.

The Problem: High-Volume Multi-Account Fraud

The marketplace rolled out an aggressive "New User" discount campaign to increase market share. However, they quickly realized that only a few users were taking advantage of a huge portion of the rewards.

Professional fraudsters used automated tools in order to make hundreds of fake accounts. Through the use of "app cloners" and virtual environments, they made every account appear as if it belonged to an individual.

The impact was catastrophic:

Massive Revenue loss Marketing dollars went to bots, not actual customers.

Data Pollution Growth metrics were artificially exaggerated and it was impossible to determine the real customer Acquisition Cost (CAC).

Actual users were not able to take advantage of limited-time deals which weren't "snatched" by automated scripts within a matter of minutes.

Why Traditional Methods Failed to Stop Marketplace Fraud

The initial market depended on industry standard such as IP monitoring and text message OTP (One-Time Password) verification. Although these tools are not new but they can be easily beaten by fraud syndicates of the present.

The Limits of IP Tracking

Criminals made use of residential proxies as well as VPNs to change IP addresses on a regular basis. Because many legitimate users share IP addresses (like in a cafe or at the office) it is impossible to prevent these, without causing harm to legitimate customers.

The Failure of Phone Verification

The team found the fact that "SIM farms" and virtual number services permit fraudsters to avoid OTP checks to steal small amounts of money. Using a number as a proxy of the identity of a person is no longer sufficient.

Bypassing Basic Browser Fingerprinting

The standard scripts were easily fooled. Criminals used special browsers to disguise the most basic details of a device, such as screen resolution and user-agent strings, thereby making each fraudulent account appear "clean."

The Solution Approach: Moving to Device Intelligence

To prevent the abuse of promotional offers, the market had to examine more than the information the user gave (emails and numbers) and examine the devices used by the user.

They needed a solution which could detect spoofing methods and reveal the indestructible "DNA" of a device regardless of how many times a user has cleared their cache or installed the application. This is when device intelligence is the main security line.

How DeepID Solved the Marketplace Fraud Crisis

The marketplace incorporated DeepID's SDK to provide real-time insight into their activity. Instead of focusing on only one data element, DeepID analyzed hundreds of subtle signals to create a complete fingerprinting profile for the device.

Detecting High-Risk Environments

DeepID was able to detect the app's marketplace was running within "cloners," emulators, or parallel spaces. These are typically used to prevent fraud on multiple accounts.

Linking Hidden Identities

If a fraudster did change their email address, IP address, and name however, the global device ID of DeepID remains the same. This enabled the market to determine that the 500 "new users" were actually the same device.

Real-Time Risk Scoring

Every time a person tried to redeem a discount coupon, DeepID provided a risk score. High-risk devices were prevented from taking advantage of the discount, and legitimate users were not subject to any hassle.

Results & Impact: Winning Back the Marketing Budget

Switching the focus from blocking reactively to proactive monitoring, the market saw a rapid shift in their performance.

92% reduction in Promo Abuse The system was able to identify and stop nearly the entire automatic "New User" claims.

A 85% decrease in fake accounts With no incentive to earn free credit, fraudsters moved towards more attainable targets.

Increased ROI of Campaigns The marketing team noticed an increase of 3x in conversion rate from "New Users" to "Repeat Buyers," because discounts finally made it to real customers.

Genuine users had longer time in order to redeem rewards which lead to higher ratings for the app store in addition to brand loyalty.

Key Takeaways

Identity isn't an email 2026: An phone number or email address is not a reliable identifier. Physical devices are the only way to identify a person.

Don't just stop accounts or IPs; stop the hardware footprint in order to stop the fraud cycle.

Prioritize Clean Data Accurate growth metrics are only achievable by removing the bot-driven "noise" in real-time.

Fraud prevention takes place behind the scenes, which means that your customers' best clients never encounter a CAPTCHA.

Conclusion

Market success is dependent on trust and the effective utilization of capital. Letting promo fraud persist is to allow your marketing budget to be used to fund fraud.

When you implement advanced device analytics, you safeguard your margins and ensure that your expansion is driven by human beings. It's time to stop guessing who your customers are and begin to understand what devices they use.

Ready to secure your marketplace? Book a DeepID Demo