Merchants who find themselves dealing with this kind of fraud need to look at the software tools , operational procedures, and customer service training that is allowing fraudulent purchases to go through. Some merchants may benefit from anti-fraud tools that use machine learning to identify potentially fraudulent transactions, assigning them a risk score based on information gathered from past transaction data.
In many cases, however, this kind of fraud is discovered before the merchandise is shipped out, since customers usually receive an email confirming any purchase.
A more reliable way for fraudsters to wring actual cash out of a stolen account is to buy mass quantities of gift cards, which can be used immediately. Most merchants would benefit from putting a system in place to automatically flag large or repeated gift card purchases for review. While there are various protections in place to prevent this, most of them are relatively easy for determined or experienced fraudsters to get around.
Fraudsters may also copy down the card numbers and activation codes on cards still on the sales rack, using stickers to cover up any scratch-off coverings they removed. As soon as an honest customer purchases and activates one of the cards, the fraudster can start using it.
Smaller merchants may be able to be more restrictive about how and when customers have access to unsold gift cards. Remember, a gift card security problem is a chargeback problem waiting to happen — or more likely, a chargeback problem already happening. Conduct information security reviews and do what you can to enable as much tracking and monitoring as you need to identify the sources of gift card fraud and take whatever action might be necessary to stop it.
If you're struggling to prevent gift card fraud or any other chargeback issue, you may want to look into hiring a chargeback management firm. They can help you set up the appropriate anti-fraud measures for your business, as well as prevent and fight chargebacks in general. Thanks for following the Chargeback Gurus blog. Feel free to submit topic suggestions, questions or requests for advice to: win chargebackgurus.
July 08, Chargeback Prevention. How do I prevent them? Can gift cards be traced? Most single-store gift cards can't be traced. Those tied into credit card networks, such as Visa prepaid cards, can be. I have not ordered via mail and am not aware of the information provided when purchasing this way. I just want to be prepared in case I am in the same situation. Theft by the USPS employees is very common. During the Christmas season I was warned not to send gift cards via mail, especially to a PO box because they go missing.
My gift to a different person never made it to her this year. In my instance, I had the activation codes, but the cards never came through. I have a systematic way of auditing against which cards are still in route. Target online account hacked all registered gift cards stolen and used in different states.
I have gift cards mailed to me as a gift that I never received. I try to always pay with amex but, if its for a new card I feel very nervous not every company is like amex.
Makes it almost impossible to reconcile the cards against the CC you used to pay for them when doing multiple orders over several days.
Would be very interested in remedying this situation. On the other, it makes it easier for someone to steal the balance. Kind of an old school way of doing things but, hey it works.
I make a note of which CC I used along with the GC design, date ordered, etc… So that when those GCs start showing up in the mail, I know precisely which one of my orders it corresponds to. Great tip. Will defiantly give your method more thought though. I cycle through a set of designs I like, so I repeat them eventually. Below are places to look for the missing gift card number:. If you find the lost gift card number, then your chances of recovering the associated funds increase significantly.
Gather activation, purchase and transaction data instead. Read this post on Gift Card Scam Protection. Once you have the gift card number or as much information as you can find , call customer service for the merchant that issued the gift card. Be aware that you will likely have to dig in and be prepared for more than a simple phone call. Thieves love gift cards almost as much as they love cash and gift card scams are the modus operandi du jour.
If you purchased the gift card with a debit or credit card, contact your bank to see if they have a replacement option for lost or stolen merchandise. You should also let the merchant know that you are not the person who used the card. The key to recovering a missing gift card is knowing the gift card number. To be sure you never get caught without the gift card number again, take the following precautions:.
Seeing the gift card will help you use it in a timely manner. Using the card quickly prevents you from losing it. If you lose the physical plastic, you can always spend the gift card online or call the issuing gift card company to order a replacement.
The easiest way to keep track of gift card numbers is to enter the cards into a mobile wallet or gift card app. I have used several. For this reason, I think gift card apps are useful for more than just making sure I have a way to recover a lost gift card. Be sure to scratch the PIN off before taking the picture.
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