A Gift Card That is Anything But: Fighting Gift Card Fraud

Gift cards are a $150 billion-dollar industry so it’s no wonder that many small and medium businesses are keen to offer them in their stores. But doing so opens up opportunities for fraudsters with scams that leave customers and business owners in the lurch.

Thankfully, there are ways you can limit gift card fraud to protect your business and your customers.

How Gift Card Fraud Happens

The point of sale (POS) is where most scams with gift cards occur, as limited supervision provides the opportunity for employees to abuse trust. Tactics range from swapping a customer’s partially used card with inactivated (i.e. zero balance) cards, to activating cards and then shutting down the register before tendering the transaction.

But it doesn’t stop there. Fraudsters are also using stolen credit cards to buy gift cards in-store, which they then sell for cash, essentially laundering money through your business. Similarly, counterfeit and fraudulent cards are being sold on auction websites.

Worst of all, fraudsters will take pictures of the codes of cards found on in-store displays. They’ll then constantly check the balances of those cards to find out when they have been bought and activated – once that happens they’ll spend the money before the customer can. 

How to Fight Back Against Fraudsters

Thankfully, there are some simple tactics you can use to fight gift card fraud. Here are a few of the most important ones:

1. Control in-store displays: if your store has an in-store gift card display it’s crucial to ensure that it is safely behind a counter and that codes can’t be viewed and copied.

2. Staff training: you should train your staff about gift card fraud, so they can be on the look-out for potential fraudsters. They are your first line of defence!

3. POS surveillance: cameras behind the cash register are unfortunately essential - even if you trust your employees like family it’s good to have this as insurance and to ward off the temptation to steal via gift cards.

4. E-gift cards: e-gift cards shut down many of the avenues that fraudsters use to rip off small businesses. Online authentication and the fact that there is no physical card to copy make e-gift cards highly secure.

When you’re a small business owner your passion for your product drives you. Therefore, when someone deceives your customer and cheats your product, it’s personal. Make sure you protect your company from gift card fraud.

The AnyCard platform is secure, easy to use and designed for small business. Sign up today and you can sell your first e-gift card in just fifteen minutes with no up-front fees or monthly overhead at www.anycard.ca

Written by Chad Molleken, AnyCard Marketing CEO