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POSitive Processing Blog 

Gift Cards: The Gift That Thieves Keep Taking
Monday, April 29, 2019

Gift Cards, Fraud, Theft, Security  Gift cards. They attract new customers, improve loyalty, and increase cash flow. We’ve talked about how gift cards boost your bottom line, now it’s time to discuss how to protect your business from fraudsters looking to take advantage of these revenue boosters.  

It’s no secret gift cards are one of the easiest ways for merchants to increase both consumer traffic and profit margins. However, as the volume of gift cards increases year after year, the amount of fraud against consumers and merchants has also become a growing issue.

HOW GIFT CARD FRAUD WORKS
Gift card fraud can take on several different forms. This past holiday season has shown us a few emerging trends in both in-person and online fraud.  

Physical—The loss from physical gift card fraud can seem relatively minor, but they can add up. Almost 60% of retailers reported fraudulent gift cards in 2017, accounting for billions in annual losses across the country. Common physical scams include Scratch-off, fraudsters copy the gift card number, scratch off to get the pin, and then replace it with another cover, and Return, stealing items, returning the items for store credit, and reselling the gift card for cash.

Electronic—E-gift cards are great for both online and physical merchants, saving you time and money while being highly convenient. However, a breach on this front can be extremely costly to an unprotected business. If a business is breached, thieves can gain access to hundreds of cards all at once, causing potentially unlimited damage.

HOW TO PROTECT YOURSELF
When it comes to physical gift cards, always keep them close at hand. Have a display at the POS terminal where customers can easily purchase them, while still keeping them protected. If you have a floor display, consider changing up the packaging. If the card is sealed in a way that the pin cannot be accessed without obvious damage, the odds of it being scammed drastically decrease.

The best step to protecting yourself? Partnering with a payment processor whose top priority is your security. The tighter your payments and processing security is, the less vulnerable you are to data theft. Also, ensure your processor provides both incident management and insurance.

At OMEGA, we work every day to provide our merchants with the best and most secure options to keep you, your business, and your consumers safe from fraud. Our PCI ToolKit and Vulnerability Scanning reduce risk and continually check for potential weak points of entry, while our Data Incident Management Program and Breach Insurance protect your business in the event a breach should occur.  

Don’t let the fraudsters scare you away from the bottom line boosting world of gift cards—we’re here to keep you secure!





 
 

Categories

  • B2B and E-Commerce Solutions
  • Data Security and Fraud Prevention
    • 04/29/2019 - Gift Cards: The Gift That Thie
    • 04/03/2019 - Chargebacks: What Are They and
    • 02/13/2019 - 3 Tips To Protect Your Busines
    • 11/12/2018 - Are you PCI Compliant?
    • 03/14/2018 - Merchant Guide: 10 Essential T
    • 02/12/2018 - Common Business Scams and How
    • 02/09/2018 - Data Security Fast Facts
    • 01/17/2018 - Vulnerability Scanning vs. Pen
    • 01/17/2018 - BBB Warns of Email Scams This
    • 01/10/2018 - Arm Your Business Against Cybe
    • 11/15/2017 - MERCHANT FRAUD ALERT, 11-15-20
    • 09/22/2017 - Have You Heard How OMEGA’s Dat
    • 08/02/2017 - MERCHANT FRAUD ALERT, 08-02-20
  • FI Partner Program
  • Gift Cards and Customer Rewards
  • Just For Fun
  • Miscellaneous
  • Mobile Payments
  • OMEGA in the Community
  • OMEGA Merchants, News, and People
  • OMEGA Spotlight
  • Payments Industry
  • Point-of-Sale Systems
  • Products and Services
  • Short-Term Capital Funding

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