November 20th, 2015
For many retailers, selling gift cards through a third party is a major sales channel. As a retailer selling gift cards in the third party space, you have to be cognizant of inventory, maximization of peg space, and of course, fraud. Many retailers don’t know or believe there is a fraud problem, and assume it only occurs with certain brands or dollar values. In reality, fraud happens to almost every brand at every dollar amount.
Card swapping and card tampering are just a couple of the ways thieves are perpetuating fraud. Your customer thinks they are activating their card, but are unknowingly activating a card in the hands of a thief. It’s one thing to be on top of fraud that is happening in your stores, but how do you prevent fraud that is occurring in third party locations? As one of the leading global payments technology companies, VISA understands they may never eliminate fraud completely, but they are constantly monitoring transactions to learn how the fraud is being executed and taking action to lower the incidence.
How do you monitor gift card fraud in your organization? What processes do you have in place to ensure your managers at the store level are reporting issues with zero balance cards? Is Customer Service involved with the reporting and resolution of these issues? By handling issues at the store level, your well-intentioned store managers may be addressing customer issues at the surface, but could actually be covering up a larger issue.
Awareness of this issue is one way you can begin decreasing its impact. Operational training at the store level on how to process and report zero balance card transactions as well as defined processes at the corporate level on how to research those reported transactions gives visibility and definition to the overall issue.
In addition to awareness, it is also important to make your cards more secure. Below are some actions you can take, in order of level of security from lowest to highest, to begin making your cards more secure:
- PIN Scratch-Off: Cover the PIN number. This keeps simple fraud like photographic capture of card and PIN numbers from occurring.
- Full Number Scratch-Off: Protect both the card serial and PIN numbers. This makes tampering evident.
- Mag Stripe: Encrypt the card number within the mag stripe. This leaves no human readable number or standard bar code visible to steal.
- Secure Packaging: Wrap the card completely inside a carrier, seal the package shut. This is proven to be the most effective method to reduce fraud
Optimum Card Solutions utilizes all of the above listed methods with our retail partners. In 2015, we invented a new, cost-effective secure package that is already being hailed as the industry’s premium standard for card security while keeping overall print costs low. We use paper tear die marks, a proprietary application of hot and cold sealing glues, and an additional application of glue that secures the entire package.
Gift card secure packaging is one of many areas of expertise for Optimum Card Solutions. Contact us today to learn more about more about the solutions we can provide for you that can improve your card program and positively affect your bottom line.