12/30/2024

Cracking Down On Gift Card Fraud

Forbes

As the holiday season approaches, a familiar yet unwelcome threat returns—not the green Grinch of storybooks, but a more elusive threat to consumers and retailers alike: gift card fraud. This increasingly prevalent form of theft targets the billions of dollars that flow through the gift card market each year, leaving victims frustrated and retailers liable.

Gift card fraud—which is the manipulation or theft of funds from gift cards before their use—has surged in recent years, with the issue reaching an all-time high last year. Americans lost an estimated $217 million to gift card fraud in 2023, and a recent survey found that over 1 in 4 U.S. adults have experienced some form of gift card fraud. It is additionally estimated that only about 5% of all instances of gift card fraud are reported, thus the size and scope of the problem could be significantly larger.