Gift Card Fraud
Gift cards are ubiquitous in the restaurant/ retail industry. They represent hassle-free transactions, guaranteed sales, and you even receive the money up-front! You spend a small fortune protecting your cash with high-tech safes and camera systems, and even more protecting your customer's credit cards. But have you stopped to consider how to protect gift cards? Wherever money exists, thieves work tirelessly to steal it from you. Gift cards are not an exception, and they offer criminals effortless income with little chance of being caught. But unlike credit cards, gift cards rarely register on the security radar-even as crooks walk away with millions of dollars each year. Fortunately, you can implement simple safeguards to keep you and your customers from becoming victims. Let's look at how you can prevent it.
If you suspect a customer is trying to use a stolen credit card, you have the right to request identification. If a card is signed, however, Visa and MasterCard prohibit merchants from requiring identification. You can still ask for it; you just cannot require it.
If your company permits it, you can either limit or prohibit the sale of gift cards using credit cards. Or, if you do allow gift cards to be purchased with a credit card, consider limiting the value to $25.00 per transaction to possibly prevent chargebacks.
Do not store gift cards where they can potentially be stolen. Store them behind the counter or out of reach.
Track gift card inventory, sales, and usage. You should know how many you have at any time, and if any are missing.
Train your employees to recognize gift card fraud. In general, most fraud can be prevented with proper training.
If you know or suspect a gift card has been stolen, or receive notice that a chargeback for a gift card purchase has occurred, call your gift card processor immediately and ask that any remaining balance on the card(s) in question be canceled. This can often limit the damage if the theft has already occurred.