Sue Murphy
Manager, Operations/Product Services
January 5, 2017

Tips to Protect Your Employees—and Your Company--Against Gift Card Fraud

Over the holiday season, gift cards flew off the racks. Sales of gift cards in 2016 were expected to grow by 7 percent over $130 billion in gift card purchases in 2015. Nearly 75 percent of survey respondents in 2015 said they were likely to purchase a gift card, and the average amount spent in 2014 was nearly $48 per card. Where there’s big money, there’s the potential for big fraud, so here are some tips for your employees and your organizations to protect against gift card fraud any time of the year:

Tips for Employees:

• Open loop cards—gift cards that can be used anywhere—are popular, but are  more likely targets for fraud, according to George Delta, legal counsel to the Incentive Federation. Enjoy, but be especially careful with this type of gift card.

• Don’t click on those “free gift card” ads that pop up on the web. The Better Business Bureau warns that this is just a way of getting personal information that can then be used for identity theft.

• Be cautious with debit cards. ATMs, gas stations, online purchases and restaurants are high risk for swiping debit cards, warns bankrate.com. Card skimming devices installed on ATMs capture the user’s card information and PIN, whereas “the human touch” comes into play at restaurants when diners hand their debit card to their server, who then disappears with it for several minutes—ample opportunity for the unscrupulous to capture card information.

• If you’re in a loyalty program, check your account at least one a month. Points accumulated in loyalty programs are also a huge target because of recipients’ personal information that is associated with loyalty card accounts. Incentive Magazine reports that loyalty“…points and miles are worth an estimated $48 billion in the US alone” making them a lucrative target for fraudsters.

Tips for Employers

Whether for your rewards and recognition program or as a one-off purchase as an employee gift at the holidays, purchase through providers in the incentive industry. This is especially important for small organizations that may be thinking of purchasing cards at a local retailer—don’t do it. Go to a provider. Lists can be found on the Incentive Gift Card Council website

Questions you should ask the vendor are covered in depth in an earlier post (“How Secure is the Data in Your Rewards and Recognition Program?  5 Questions to Ask Your Vendor”). Here’s a summary of what to do:

• Be sure that the provider is PCI and US-EU Safe Harbor Compliant.

• Put your vendor through security due diligence, asking them to detail corporate and IT data security policies.

• Ask how the vendor prevents unauthorized access to the data. There should be both physical and logical controls in place.

• Ask the vendor how prepared they are for any data security breach. And, if it happens, will your program still be operational and safe?

• Is the vendor continuously monitoring their policies and current with any needed updates?

Gift cards are fun to receive and easy to give—getting even easier to give as plastic cards go digital (e-gifting rose 26 percent in 2015, according to CEB TowerGroup). By following a few easy tips, you and your employees can avoid gift card fraud at the holidays and beyond.

Are you looking at gift cards for your rewards and recognition program, or as holiday gifts for employees and partners?  Contact a Marketing Innovators solutions specialist who can help you make a choice that fits your budget, goals and time frame.

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