Referral programs that do not reward the wrong people

Referral programs are easy to launch and easy to lose money on. The losses rarely come from a big fraud ring. They come from ordinary shoppers who notice that a second email address earns a discount, and from refunds that leave the referrer holding a reward for an order that no longer exists.

Reward on the right event

An order placed is a promise. An order delivered and kept is a sale. Pay the advocate when the referred order clears the return window, or at least on delivery. If your tool can only pay on order placed, treat the reward as a loan you may need to recall.

Match people, not addresses

An email address is the weakest identifier a store has. Match on phone number, shipping address and the device that placed the order before you call someone new. A referral from one person to the same household is a judgement call; a referral to the same device is not.

Claw back on refunds

When the referred order is refunded, the reward should be reversed without anyone opening a spreadsheet. The same applies to points earned on the order. Put the rule in the program terms so the reversal is expected rather than surprising.

Keep the advocates

None of this should make the program feel suspicious to the people it is for. Show advocates what they earned and why, pay promptly once the checks pass, and keep the share link simple. The checks run in the background; the experience stays generous.