Title: Preventing misuse of discount promotions in e-commerce websites: an application of rule-based systems

Authors: G. Vishnu Manohar; Biplab Bhattacharjee; Maheshwar Pratap

Addresses: Department of Management, Amrita Vishwa Vidyapeetham, Amritapuri, Kollam, 690525, India ' Information Systems and Analytics, Indian Institute of Management, Shillong, Meghalaya, 793014, India ' Department of Management, Amrita Vishwa Vidyapeetham, Amritapuri, Kollam, 690525, India

Abstract: E-commerce websites continue to get affected by fraudulent online activities in spite of the substantial efforts made by different stakeholders such as card issuers, banking intermediaries, merchants, and law enforcement agencies. First-time promotional discounts are offered by e-commerce websites for gaining and retaining new and existing customers. However, in several instances, such discounts are abused by fraudsters. Surprisingly, little attempt has been put in the past to detect such abuses. This study is the first attempt in this direction and uses transaction data of an e-commerce company to develop a rule-based detection system. The rules-based system is developed in two-stage processes, generation of facts and rules, respectively; and it is further validated by experts. An architecture of a rule-based fraud detection system is also proposed. Using rule-based detection system, the company can flag-off the probable abusers, and can subsequently monitor their behaviour and take decisive actions.

Keywords: e-commerce fraud; promotional abuse; fraud detection; preventing misuse; discount promotions; e-commerce website; rules-based systems; online fraud; fraud prevention.

DOI: 10.1504/IJSOI.2021.114111

International Journal of Services Operations and Informatics, 2021 Vol.11 No.1, pp.54 - 74

Received: 11 May 2020
Accepted: 26 May 2020
Published online: 08 Apr 2021 *