Foursquare Cracks Down on Users Who Cheat Local Biz Promotions

  |  April 8, 2010   |  Comments

Social location platform says new system will stop fraudsters from gaming small business rewards programs.

Foursquare is cracking down on users who have been cheating frequent "check-in" loyalty programs run by local businesses. In a Wednesday blog post, Foursquare said a system will detect when users employ its mobile app to "check-in" at restaurants, bars, retail stores, and other establishments, but aren't actually arriving at those locations.

For the last seven months, hundreds of businesses have been utilizing the free-to-use "Foursquare For Businesses" platform. The establishments have been rewarding Foursquare users with free drinks, food items, and discounts if they employ the app to "check-in" when visiting theirs stores a certain number of times. An example from a Canadian pizza joint using the platform: "Free slice and drink on your 10th check-in. Free Large Pizza, 1 topping on your 20th check-in!"

Advertisers like that one are drawn to Foursquare due to the sticky nature of the game. For instance, if the user has more check-ins than anyone else for a business, the person becomes the "mayor" of the location until someone out-visits him or her. Eric Pavony, owner of the Full Circle Bar in Brooklyn, NY, said his regular crowd of tech-savvy marketing professionals, artists, and freelance writers take their Foursquare check-ins "very seriously." He welcomed the news of the brand trying to referee how rewards are gained via the game.

"If that's possible, I definitely think it's a good thing," Pavony said. "It's good to make sure that the people who take it seriously and use the application the way it was intended...that they get rewarded."

Foursquare says its "cheater code" will single out fraudulent users that have a global positioning system (GPS) in their phone, denying them check-in points that can be rewarded at businesses. The system will still allow them to check in, the New York-based firm says, but they will not accrue any points that are valued in the game unless they actually visit the establishments.

The company has also evidently figured out a way to block people without GPS on their phones from picking up rewards points. Its blog said: "Since last summer, this has been one of our most requested features and has been one of the trickiest to get just right."

The white-hot Foursquare brand has almost doubled its user base in the last three weeks, going from 400,000 to at least 750,000. Reports are swirling that Yahoo is considering buying the company for $100 million. The Sunnyvale, CA-based Web portal is likely attracted to Foursquare's possible future as a geo-couponing platform as well as a potential local marketing juggernaut in general.

What's more, Wednesday's announcement marked the second time in the last month Foursquare has reached out to local businesses. During the week of March 8, it began offering businesses a free-to-use dashboard to track activity associated with their locations. The metrics include total check-ins, the number of check-ins that get posted to Facebook and Twitter, and total unique visitors.

If Foursquare's cheater detection system works, those businesses won't have to look at their stats with a suspecting eye. In theory at least, they'll know that users aren't sitting at home on their couch while stacking up check-ins in order to pick up a freebie from the establishment.

Follow Christopher Heine on Twitter at @ChrisClickZ.

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ABOUT THE AUTHOR

Christopher Heine

Christopher Heine was a senior writer for ClickZ through June 2012. He covered social media, sports/entertainment marketing, retail, and more. Heine's work has also appeared via Mashable, Brandweek, DM News, MarketingSherpa, and other tech- and ad-centric publications. USA Today, Bloomberg Radio, and The Los Angeles Times have cited him as an expert journalist.

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