The Clearsale Blog

Nov 11, 2020 featured

What retailers need to know about gift card fraud

What retailers need to know about gift card fraud

Shoppers plan to buy a lot of gift cards this holiday season. And that means retailers will need to watch for more fraudulent transactions.

Gift card sales—both physical and digital cards—typically spike during the holiday season. In Deloitte’s annual holiday survey of 4,012 consumers released in October 2020, 48% of consumers (the No. 1 response) plan to buy a gift card—physical or digital—as a gift for the 2020 holiday shopping season. Amitai Sasson, vice present of ecommerce at online retailer overstockArt.com can attest to this first hand. Gift cards purchased through its website generate roughly 10% of sales during the holiday season, compared with 5% during any other season of the year, Sasson says.

And the reason for the increase in gift cards during the holiday season is clear: gift cards make easy gifts for hard-to-shop-for family members. But that also makes them a target for fraud. Gift cards are attractive to criminals for the same reason they are attractive to gift-givers: they’re easy. Criminals committing online fraud want to easily turn merchandise into money. This is also why electronics and not apparel is a common product category for fraud. Electronics are often high-value goods that have mass appeal, whereas apparel has to fit and is tailored to consumers with different preferences. Gift cards are the same.

An estimated 10-25% of fraud attempts on an online retailer’s website are to fraudulently purchase a gift card, says Rafael Lourenco, executive vice president, ClearSale. Nearly half of online retailers in the Digital Commerce 360 Top 1000—48.5%—accept gift cards as an online payment method. Retailers have already noticed a spike in gift card sales during the coronavirus pandemic, the holiday season is only going to make gift card sales grow even more. Merchants should be aware of the fraud associated with selling and accepting digital gift cards, and how to prevent it during these high-volumes times.

To get immediate access to the rest of this article, sign up for a free Strategy Membership using the Join for Free button below. If you’re already a member, please sign in.

 

Original article at: https://www.digitalcommerce360.com/article/gift-card-scams-fraud/

 

You may also like

Holiday shopping may overwhelm delivery capacity this year. Does your store have a plan?

Holiday shopping may overwhelm delivery capacity this year. Does your store have a plan?

As many as 700 million gifts may arrive late this holiday season, according to retail analysts who foresee extra demands on shipping companies that have already been struggling with rising..

Research: Fraud transparency is key to earning US consumer trust

Research: Fraud transparency is key to earning US consumer trust

Can online merchants earn more customer trust by talking about fraud? Yes, according to a recent survey of more than a thousand US online shoppers. It sounds counterintuitive, but raising the..

ClearSale and BigCommerce Prep Ecommerce Small Business

ClearSale and BigCommerce Prep Ecommerce Small Business

ClearSale and BigCommerce have come together to help small businesses address fraud as the holiday shopping season fast approaches. And this year, more than any other year, primarily driven by the..

Ecommerce Has Seen Holiday-Level Demand Most of The Year. What Will the Holidays Look Like for Merchants?

Ecommerce Has Seen Holiday-Level Demand Most of The Year. What Will the Holidays Look Like for Merchants?

According to Adobe Digital Economy Index report for May 2020, ecommerce spending in May overshadowed the entire 2019 holiday season. Due to pandemic restrictions and health practices that saw..

What Will This Holiday Shopping Season Look Like?

What Will This Holiday Shopping Season Look Like?

Given the ongoing COVID-19 pandemic, the upcoming holiday shopping season will undoubtedly be unique. There are plenty of customers new to the e-commerce world, some of who will opt to keep their..

Influencer Insights: Can Dynamic Card Verification Values Stop CNP Fraud?

Influencer Insights: Can Dynamic Card Verification Values Stop CNP Fraud?

Authenticating customers is one of the biggest fraud-fighting challenges for merchants. It gets tougher with every data breach, as stolen card data floods the criminal marketplace. When that ..

Avoiding false declines

Avoiding false declines

Merchants, what worries you more, getting ripped off by fraud or offending your customers? If you said fraud, that’s reasonable. Organized criminals using stolen carddata and hijacked customer..

CONSUMER DATA MIGHT BE THE NEW OIL, WHO GETS TO DECIDE HOW IT’S USED?

CONSUMER DATA MIGHT BE THE NEW OIL, WHO GETS TO DECIDE HOW IT’S USED?

From the Cambridge Analytica scandal to GDPR and data breach headlines, the idea that consumers should know how their data is used is gaining traction with governments and consumer groups. What..

How to Manage Your Company’s “Growing Pains” When It’s Growing Fast

How to Manage Your Company’s “Growing Pains” When It’s Growing Fast

Growth is the main goal for many startups, but managing that growth well is a big challenge. How do you keep your company organized, focused, and culturally coherent even during rapid growth..

Want to write
for our blog?

Please review our writers' guidelines
https://www2.clear.sale/press/clearsale-guest-blog-guidelines
and then email guestwriter@clear.sale with your pitch!

Subscribe to our blog