Loyalty programs are susceptible to fraud for all of the following reasons EXCEPT:

• A. Loyalty points can only be used for products or services offered by the original company.
• B. Some airlines allow the conversion of travel points for tickets in another person's name.
• C. Loyalty points can often be used to purchase sellable items such as gift cards.
• D. Many loyalty programs allow the transfer of points from one account to another.

Answer: (A)

Loyalty programs become vulnerable to fraud when points or rewards can be moved, shared, or converted in ways that bypass normal controls. If points can be transferred between accounts, they can be siphoned off or shuffled to evade detection. When points can be used to obtain sellable items like gift cards, those cards can be sold for cash or used to launder value, creating a clear fraud pathway. Allowing travel points to be converted into tickets in someone else’s name enables impersonation and misuse of accounts. In contrast, the option that points can only be used for products or services offered by the original company doesn't open up these misuse routes; it constrains where the value can go and therefore is not a fraud risk factor.