by Alex Palmer | January 09, 2020
The holidays may be over, but gift card fraud continues to be an issue that should top the concerns for any organization or individual. Not only can individual recipients lose their rewards, but fraud can also completely undermine an organization's incentive program goals.

"When recipients have a negative experience with gift cards, the positive outcome businesses had hoped for can be marred and leave both sides frustrated," says Theresa McEndree, vice president of marketing at Blackhawk Network, a branded gift card company that works with organizations to incorporate gift cards into their incentive programs. She emphasizes that "fraud is a very small part of what happens in the gift-card market," but she points out that when it does occur, businesses lose more than the face value of the card -- by rewarding recipients twice, essentially, to salvage the positive experience, and by suffering a hit to the reputation of the program.

Gift card fraud costs individuals and companies huge amounts of money. The Federal Trade Commission received reports of losses adding up to $1.48 billion in gift card fraud in 2018 -- a 38 percent increase over the previous year. Scammers are getting more creative, introducing new ways to convince individuals to part with the value of their gift cards or draining them before they can be redeemed. At the same time, gift cards are becoming more popular as a gift of choice.

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