In today’s world, word of mouth plays a crucial role in influencing consumers’ purchasing decisions. When combined with a reward, referrals become a powerful customer acquisition tool designed to encourage existing customers to recommend company’s products to others in exchange for an incentive. These programmes have become increasingly popular in e-commerce, online banking or credit card companies. Well-designed referral reward programmes improve customer acquisition, retention and loyalty, which ultimately drives growth and maximises business profits. Unfortunately, not all companies understand consumer behaviour and the motivations behind word-of-mouth. This leads to undesirable consequences such as low quality recommendations, loss of customer trust, poor customer retention, damage to brand image and reputation, reduced market share, weak revenue generation, limited competitive advantage and increased legal and regulatory risks.