Gift cards are becoming a more and more popular type of present, especially when you are not sure what to get someone for their birthday, holiday, or some special occasion. A gift card from their favorite restaurant, store or even a spa is a perfect solution. You will be able to sort out a perfect present in a matter of minutes, and the receiver of the gift card will also be happy as they are receiving something they really like.
This also benefits the business from which the gift card was purchased for. Not only have they already made a profit with the sale of the gift card, but in most cases they will also earn additional profit as the gift card receiver will spend more than the amount from the gift card. It can also create new return customers in instances when this is the card receiver’s first interaction with the business in question.
But with the rise of the gift card’s popularity, there has also been an increase in fraud attempts connected with gift cards. This is not a reason why businesses should stop utilizing gift cards in their day to day operations, they just need to start being more vigilant and start taking proactive measures to protect themselves.
What is Gift Card Fraud?
According to SEON, gift card fraud covers all forms of fraudulent activity that uses gift cards to accomplish fraudsters malicious intentions. This type of fraud does not discriminate and it can target a retailer or a customer as with either of targets the fraudsters will come out with a financial gain. With the various types of gift card fraud like gift card chargeback or return fraud, purchases with the stolen credit card details, account takeover purchases or even brute force bots attacks it is getting harder to prevent it from damaging your business. This is where risk operations or RiskOps come to save the day.
How to protect your business?
It is essential for every business or organization to be aware of what risk they might face and what they can do to prevent that risk from becoming a reality. With RiskOps companies not only analyze all the potential risks and create a plan of how to prevent threats from happening but they also have a plan in place of what to do if the worst actually happens. Its main goal is to make sure the business or organization continues with its normal operations safely and effectively, while staying protected from any type of fraud attempt, including gift card fraud.
Track the gift card data
You need to monitor and keep track of your gift card data as that will help you develop patterns of normal and legitimate behavior and by doing so make it easier to notice any discrepancies that might indicate fraudulent activity, for example duplicate cards or multiple gift cards purchased with the same payment details.
Increase Internal Controls
To prevent gift card fraud before it can do any damage to your business, you need to be proactive. The best way to do so is to have a strong internal system that can monitor what happens in your business, from your customers to your employees ensuring their safety from account takeover, phishing or any other attack.
Put limits in place
Fraudsters love gift card fraud because it is easy and anonymous. They can damage your business for thousands and then just disappear. By putting some limits in place, you can reduce the damage your company might encounter. From limiting the number of gift cards users can buy in a single transaction and preventing fraudsters from using your store to test stolen card numbers to limiting the amount customers can buy and reducing financial loss.
Implement proper security protocol
Most businesses are still not aware of dangers gift card fraud can cause to their business so they do not have a proper security system in place. According to the Federal Trade Commission gift card fraud has topped the list of reported fraud payment methods every year since 2018 and that doesn’t look like it is going to change any time soon. In order to protect your business from gift card fraud you need to develop proper security protocols and most importantly keep auditing and updating it to ensure the best protection.
