Detect Gift Card Fraud Before it Happens

Detect Gift Card Fraud Before it Happens – Finding the perfect present can sometimes be extremely hard to do, especially if you need to get a present for somebody for whom you buy gifts often for different occasions or for somebody who claims they have everything they need. Isn’t it so annoying to get the answer “nothing” when you ask someone for what they wish to get? Not only that you are trying to spare yourself from endless search, but you also want to spare them from pretending they like the gift you got them at the end. The only thing worse than that is when they say they have everything they need. Who doesn’t like to receive presents?

This is why gift cards are so useful. Best thing about gift cards is that you can get them for almost any shop, online and offline, and as a bonus point everyone likes to receive them. There are currently around 12 million to 24 million online stores across the globe, just imagine how many options there are for a perfect gift card. Its ease of use and convenience ensures the gift giver is happy with the process, and at the same time the gift receiver will be thrilled as they would be able to use the gift card to pick something for themselves. Maybe you would introduce them to a completely new shop that might become their favourite or even they might use it to buy something they would never usually buy for themselves. With SEON’s gift card fraud tip you can detect  gift card fraud before it happens and prevent it from causing any damage to your business.

While everyone can benefit from gift cards, businesses can experience the most significant advantage, but also disadvantage from offering gift cards. Financial gain from gift cards is undeniable as the business has already made a profit with a sale of the gift card and they are set to make more once the gift card receiver comes to use the card. More often than not, they will either spend more than the amount allocated to the gift card or a certain amount will remain unused, in both cases resulting in profit for the business. But, as we mentioned, there are some disadvantages business can experience when dealing with gift cards, and the main one is gift card fraud.

What can you do to prevent gift card fraud?

Gift cards are extremely popular among the cyber criminals as they are anonymous, untraceable, easy to use and even easier to buy. This means fraudsters can use them quickly, successfully and with reduced risk. Once the customer or the business notices something happened, them and the money will long be gone, leaving just chaos behind them. By implementing following steps into your cybersecurity strategy you will be able to prevent it before it can create any significant damage.

1. Improve internal controls

Clearly explain duties and responsibilities of each member of your team and restrict their access to only what they need. This reduces the risk of cybercriminals using a human factor to gain access to your system.

2. Track and analyze gift card data

By keeping track of gift card data you can analyse and gather data and use them to identify patterns of standard user behavior and recognize any changes that can be a sign of fraud. For example, a standard user pattern would be a certain time passing between buying and using a card, which means that the customer using a gift card immediately after purchase, would be considered as a warning sign.

3. Conduct regular risk assessment

Having risk assessments conducted regularly means you will be aware of what risks your business might face and what you can do to fight against them. Knowledge is power and by having the right knowledge you can make a difference between your business staying safe or becoming a victim. In addition to it you need to implement security strategies such as having a business continuity plan in action, using cybersecurity tools like data enrichment and regularly updating your software and all of the devices connected to the network.

4. Limit the gift card usage

Limiting the usage of the gift cards can seriously spoil fraudsters’ plan of exploiting your business. Use the data collected from risk assessment to decide on the best course of action, such as limiting the number of gift cards that can be purchased in a single transaction or limiting the highest amount a gift card can be bought for.