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POSitive Processing Blog
Gift Cards: The Gift That Thieves Keep Taking
Monday, April 29, 2019
 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!
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