More than $127 billion is spent on gift cards each year — and you know what that means — fraudsters are paying attention.
Gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud isn’t quite as sexy as credit card fraud or data breeches because gift cards don’t involve personal identification, but it is a growing fraud industry nonetheless.
It is growing in popularity for a few reasons, including low dollar amounts mean a lower chance of prosecution, the simplicity of the crime and it’s easy to convert gift cards values into cash and merchandise.
There are three main ways that gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud happens according to CardCash.com: Hacking gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. issuers, stealing card numbers, and using stolen credit cards to buy gift cards in bulk.
With electronic data fraud at an all-time high, fraudsters are working overtime to turn their stolen data into cash, and fast, and gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud is an easy way to launder that ill-gotten money.
One scheme out of Florida saw a criminal purchase up to 45,000 gift cards in person and online and then sell those cards on gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. exchange websites. In all, the criminal racked up $7.5 million in profits.
With digital gift cards expected to comprise of more than 10% of the entire gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. market by the end of this year, it’s a hot market on the rise.
Merchants who haven’t completed the liability switch to EMV transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... processing are specifically susceptible to and liable for gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud — twice over.
First, a fraudster walks into a store and uses stolen credit card data to buy gift cards, and since the merchantA business that accepts credit cards for goods or services. isn’t EMV compliant, that transactionAn act between a seller and a cardholder that results in either a paper or an electronic representation of the cardholder’s promise to pay for goods or services received from the act. The action between a cardholder and a merchant that results in financial activity between the merchant and cardholder’s account.... is fraudulent and the merchantA business that accepts credit cards for goods or services. is liable. Then the gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. — for which the merchantA business that accepts credit cards for goods or services. was never paid for in the first place — makes its way back into the merchant’s store and is redeemed.
To make matters worse, according to Vantiv, 62% of gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud is actually committed by employees. Implementing comprehensive standards and practices for employees that sell gift cards can go a long way to preventing theft.
Gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. fraud — called “the currency of criminals” by the Internal Revenue Service — can hit any size business pretty hard, but businesses with a strong, protected gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. program can manage the threat.
Contact National Merchants Association today to add a gift cardA prepaid card that is loaded with a specific amount that the cardholder can spend at the sponsoring retailer. program to your business that fights fraud while helping increase customer loyalty and positively affect your bottom line.
Call (866) 509-7199 today.