December 5, 2017
Gift cards have become a popular go-to gift all year long, but especially now as we head deep into the holiday shopping season. And this year, digital gift cards are catching up to their plastic brethren, according to a new report. In its 2017 Prepaid Consumer Insights Study, payments processing giant First Data found that consumers on average purchased 6.1 digital gift cards per person this year. While plastic gift cards are still the form factor of choice (6.5 cards per person in 2017 compared to 5.9 in 2016 and 5.5 in 2015), e-gift cards are growing faster after showing no growth for the past three years (4.0 cards per person in 2014-16).
And, as is the case with just about every kind of transaction, the more they grow, the more opportunities criminals have to leverage them fraudulently. Gift card fraud has always been an issue for online merchants. E-gift card fraud, as a percentage, is an even bigger challenge. The cards are delivered immediately (with no shipping address, of course) leaving little time and few clues to figure out if a purchase is legitimate.
But there are ways merchants can protect themselves from fraud amidst the crush of e-gift card orders during the rest of the holiday season, including closely inspecting email addresses for suspicious characteristics or for linkage with social media accounts and perhaps setting limits on the number and amount of cards available in one transaction.
For more on these, and other best practices that can reduce fraud on e-gift card sales, read Fraud and E-Gift Cards: What You Can Do in November and December to Avoid a Chargeback Hangover in January.