Over the past 20 years, gift card programs have become powerful tools for retailers, boosting sales, strengthening customer loyalty, and increasing store visits. In addition to widespread availability on end caps and racks, these multi-faceted tools are quickly evolving beyond consumer gifting favorites into effective reward, incentive, and disbursement options for businesses—and popular budgeting tools for shoppers. Given their versatility and growing role in both business strategies and personal finance, it’s no wonder gift cards have become the go-to gifting and payment tool.
The Retail Gift Card Association (RGCA) was founded to ensure consumers have positive gift card experiences. The only nonprofit to represent closed-loop (i.e., brand-specific) gift cards, the RGCA acts as the voice of the industry and its members actively work together to advance gift card experiences.
The association, currently comprised of 110-plus top global brands and stakeholders, understands the need for cooperation and information sharing across the industry—especially when it comes to fighting fraud.
Criminals Have Crashed the Party
Like any payment tool, gift cards have captured the interest of criminals, who find creative ways to prey on shoppers by tampering with cards and packaging so they can drain the gift card balance. This tampering and draining activity accounts for a small portion of total gift card sales, but the industry takes it very seriously.
The Industry Is Fighting Back
Thanks to their deep connections with different industry stakeholders, consumer protection groups, and law enforcement organizations, the RGCA and its members actively address ways to fight these crimes proactively and at a massive scale:
- The RGCA’s Legislative Committee works with state attorney general offices to inform proposed gift card legislation, and with other industry associations to develop language to help law enforcement prosecute crimes involving gift cards. For instance, in collaboration with the Retail Industry Leaders Association (RILA) Gift Card Fraud Prevention Alliance, the RGCA advises on prosecutorial language and government relations initiatives.
- The RGCA’s Fraud and Abuse Mitigation Committee discerns how to best share information about fraud and scam trends across membership. This group works with the International Association of Better Business Bureaus (IABBB) and AARP on fraud and scam messaging to protect consumers. It also has presented to the Retail & Hospitality Information Sharing and Analysis Center (RHISAC) and regional organized retail crime associations (ORCAs) on gift card fraud and fraud trends and initiatives.
- The RGCA leads the industry in developing best practices related to fraud mitigation and technical monitoring. It is also leading an industry-wide charge to establish and share fraud-fighting guidelines that include preventing, identifying, and prosecuting crimes involving gift cards.
- Through the RGCA, the industry is executing large-scale campaigns to educate consumers on how to have safe gifting experiences. These efforts supply fraud-fighting resources to members, non-members, media, law enforcement, and other entities free of charge.
One example of these campaigns is from this past winter holiday season, when the RGCA launched a national PR and media awareness campaign to educate the public on how to have safer gifting experiences. In total, the campaign had an estimated reach of more than 305 million-plus Americans via 500,000-plus engagements generated through television, social media, radio, and media exposure. The RGCA published campaign multimedia assets as available industry resources.
Tips to Protect Your Business and Customers
To help businesses structure and manage in-store gift card programs that minimize criminal activity around tampering and draining, the RGCA offers these tips:
- Contact the US Department of Homeland Security and your regional ORCAs if you suspect gift card crime.
- Report fraud and scams to the Federal Trade Commission (FTC) online or at 1-877-FTC-HELP (1-877-382-4357), the Internet Crime Complaint Center (IC3) online, or the US Department of Homeland Security via email.
- Join the National Cyber-Forensics and Training Alliance (NCTFA) and local InfraGard chapter to partner with the FBI and protect infrastructure.
- Know whether your state has already passed new legislation to help prosecute crimes involving gift cards.
- Check with your gift card program business, online, store operations, and IT teams to ensure best practices are in place and being followed. This could include blocking foreign IP addresses from using domestic balance inquiry sites, knowing how to spot whether bots are checking gift card balances, and turning cards off if an inquiry is completed before card is activated.
The RGCA actively welcomes questions about how businesses can fight crime. If you would like additional information, please reach out to info@thergca.org or visit GiftCardSafety.org.
