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Top Gift Card Scams: What They Are & How You Can Protect Your Business

Businesses lose millions of dollars each year to fraud, theft and gift card scams. Unfortunately, you won’t be able to catch every scam, since many professional thieves are seemingly one step ahead of any security checks or hacking software you may have in place.

The best course of action is to try to spot anything that looks suspicious and note irregular patterns in gift card transactions in-store or online. Here are some of the top gift card scams to watch out for.

Malicious BOTs That Steal Gift Card Balances

Hackers use a bot or malicious software that combs through your online, gift-card balance-checking system, searching for a valid gift card number with an activated balance. Hackers then use the card balance or sell it.

What You Can Do

  • Encourage customers to use gift cards as soon as possible after buying them or receiving them as gifts. This reduces the amount of time a scammer has to steal any remaining balance.
  • Be aware that simply checking balances for customers increases the chance of fraud.
  • Require a PIN number or CVV when redeeming cards and checking balances.
  • Consider limiting the number of balance inquiries each week or month.

Stolen Gift Card Numbers

A scammer may take a gift card out of the display rack and record the card number. Then the scammer will replace the card on the rack, wait for someone to load it and then, constantly check the balance on the card. The thief can then use the gift card number for online purchases or make a duplicate plastic card and use it in the store.

What You Can Do

  • Merchants who display only a small number of gift cards at a time can be especially vulnerable in a relatively short time. Spread cards out among racks visible from the point of sale.
  • Cards sold in larger, high-volume stores near the register or on endcaps are often the ones these thieves choose. Spot-check these card numbers for fraudulent activity on a regular basis.
  • Watch for people trying to convince your customers to purchase a specific gift card over another random gift card on display.

Opened Gift Card Packages

Some card manufacturers use security packaging or a scratch-off PIN number to combat fraudulent activity. Unfortunately, neither is fool-proof. Thieves discreetly open the packages, steal the card number and scratch-off the PIN or other code on the card. Then, they reseal the package and return it to the rack. Often, neither customers nor employees notice that a thief has compromised a PIN or opened a package.

What You Can Do

  • If you notice a strange sticker covering a PIN that should be a scratch-off on a card, be suspicious.
  • Inventory your gift cards often and inspect for packaging that looks like someone tampered with it. These scammers are professionals and try to make the opened packages look just like new.
  • Double check the PIN by comparing it to uncompromised card-packaging on the same display rack.

Keep Up-To-Date on the Latest Scams

Regularly inspect packaging for tampering and keep an eye out for people lingering around the gift card areas for longer than normal times. Educate your employees about any potentially suspicious activity.

Reach out to our experienced team at Plastic Resource with questions. Give us a call at 833-290-5684 or reach us online for assistance at any time.