Use cases

Spot suspicious gift card activity across the distribution chain.

Gift card brands raise the same ten problems, in roughly this order. Each one leaves a shape in a daisy chain of signed handover records. Trace surfaces the shape. Establishing what happened is done in the case, with the parties' own records.

Three cases, walked through

Four hops each, issuance to redemption, with the state of every record. The ringed hop is where the chain and the brand's rules disagree.

03

Stolen cards and card draining

Missing or inconsistent records

Eight cards shipped to one store two days ago, receipt never confirmed. Five redeemed from four countries in three hours.

  1. 01
    Processor
    Issued
    Verified
  2. 02
    Distributor
    Allocated
    Verified
  3. 03
    Retailer
    Shipped, no receipt
    No receipt
  4. 04
    Redemption
    Poland
    No sale recorded

Redeemed without a sale

Eight cards left the distributor on one delivery note two days ago. The store never confirmed receipt. Five have been redeemed from four countries in three hours, and none was sold.

What the records say

The records that exist verify. What is missing is the signal: no receipt at goods-in and no sale before redemption. The retailer’s own goods-in record points at the carton; the brand can ask the processor to void the three unredeemed cards.

See it in the reporting preview
Looks like, shows as, the lever
Looks like
A batch redeemed shortly after shipping, from several countries, with no sale.
Shows as
No receipt confirmed at goods-in. Redemption with no sale record. One shipment record shared by the batch.
The lever
Ask the processor to void the unredeemed codes. The retailer traces the carton in its own records.
02

Distributor leakage

Missing or inconsistent records

Seven codes shipped to a retail channel. A week later four were redeemed from the web with no sale recorded.

  1. 01
    Processor
    Issued
    Verified
  2. 02
    Distributor
    Allocated
    Verified
  3. 03
    Retailer
    Shipped, receipt confirmed
    Verified
  4. 04
    Redemption
    Netherlands, web
    No sale recorded

Left the recorded channel

Seven codes shipped to one retail channel and confirmed received. A week later four were redeemed from the web, and the retailer recorded no sale. The chain and the market disagree after hop 3.

What the records say

Every record verifies, including the retailer’s receipt, so the leak is after goods-in. The retailer’s stock count is the next step in the case. With advisory checks, a reseller asking before selling would have been told it is not the holder.

See it in the reporting preview
Looks like, shows as, the lever
Looks like
Stock shipped to one channel is offered for sale through another.
Shows as
Redemptions from a channel other than the one the records show, with no sale recorded. With advisory checks, planned for the next stage, a check by a party that does not hold the code is itself recorded.
The lever
A case by hop. The party above the leaking hop is told its buyer is flagged, and knows who that is.
07

Geographic arbitrage

Policy exception

A code priced for Turkey was sold there and redeemed from the United States twelve minutes later.

  1. 01
    Processor
    Issued
    Verified
  2. 02
    Distributor
    Allocated · Turkey
    Verified
  3. 03
    Reseller
    Sold · Turkey
    Verified
  4. 04
    Redemption
    United States
    Market mismatch

Market mismatch

The code was allocated for Turkey, sold there in lira, and redeemed from the United States twelve minutes later. Eight of the ten codes in this allocation follow the same path. The two redeemed in Turkey took over a day.

What the records say

All four records verify. The exception comes from the brand’s own market rule, not from the records. Whether this is arbitrage is for the case to establish with the reseller’s order data.

See it in the reporting preview
Looks like, shows as, the lever
Looks like
Codes priced for one market, bought there in local currency, redeemed from another.
Shows as
The market on the allocation, the country of sale and the country of redemption, side by side.
The lever
Country-priced markets in policy. With advisory checks, the seller is told which market a code is priced for before it sells.

What a signal is, and is not

Trace raises four kinds of signal. None of them proves fraud on its own. Confirmation needs independent evidence, gathered in the case from the parties that hold it.

Suspicious pattern
Timing, volume or routing out of line with the channel’s peers. Worth a look, not a verdict.
Policy exception
A rule the brand set was crossed: a sector, a country, a market, a hop limit. The records themselves are intact.
Missing or inconsistent records
A handover with no receipt, a redemption with no sale, a code offered by a party that does not hold it.
Integrity failure
A record no longer matches its signature or the record before it. Something was altered after it was written.

The other seven

Open any case for how it looks, how it shows in the records, and the lever the brand has. The registry reports by hop number and role. Acting is the brand's decision, through levers it already has.

01Unauthorized resellingA code sold into a sector the brand did not permit.
Policy exception
Looks like
Codes sold into a sector the brand did not permit, or listed outside the chain after a sale.
Shows as
The sector on every handover. A sale with no onward record while the code turns up elsewhere.
The lever
Permitted sectors in policy. A case by hop number. Blacklist the hop.
04Discount and promotional abuseCampaign codes resold commercially within hours.
Policy exception
Looks like
Campaign codes resold commercially within hours of delivery.
Shows as
Fulfilment in a no-resale sector followed by a resale. A marketplace can see the sector on the record it receives.
The lever
No-resale sectors in policy. A case by hop.
05Money laundering and cash-outResold twice within minutes into an exchange.
Suspicious pattern
Looks like
Codes bought, resold twice within minutes into an exchange, redeemed within the hour.
Shows as
The number of hops and the minutes between them, against the channel’s norm.
The lever
Hop limits in policy. A case by hop. The exchange handles its own obligations.
06Stolen payment methodsOne web channel redeems in minutes; its peers take a day.
Suspicious pattern
Looks like
One web channel redeems minutes after issue while its peers take a day.
Shows as
Time to redeem per channel and per entity, against its peers.
The lever
A velocity rule. A case. The reseller reviews its orders.
08Automated balance checkingThousands of lookups on guessed code IDs.
Suspicious pattern
Looks like
Thousands of lookups on guessed code IDs from one source.
Shows as
Lookups are counted and rate-limited, and any live code found is flagged to its holder. The processor sees the same pattern on its balance API.
The lever
A case opened by the lookup-rate rule. The processor compares with its own balance inquiries.
09Insider and supplier fraudA record altered after it was written.
Integrity failure
Looks like
A record altered after it was written, or breakage out of pattern in one channel.
Shows as
Every record is signed and linked, so an altered one fails verification. Unsold shares per channel.
The lever
A case. Issuance counts per processor for the brand to reconcile against what it ordered.
10Consumer scam exploitationSeveral cards from one till, each redeemed abroad in minutes.
Suspicious pattern
Looks like
Several cards from one till in under an hour, each redeemed abroad within minutes.
Shows as
Sale channel, time, and country of redemption on the records.
The lever
A case. The retailer adds a prompt at the till.

Checks by sellers and the public, where a case mentions them, are the advisory stage planned next. Reporting and verification are what Trace does today.

See it on sample data

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