Don’t Succumb to Gift Card Scams This Holiday Season

Nov 26, 2013

According to the latest Gift Card Spending Survey by National Retail Federation, conducted by Prosper Insights & Analytics, holiday shoppers will spend an average of $163 on gift cards and certificates this year, 4% more than last year and the highest amount in the survey’s 10+ year history. The total spending on gift cards will reach approximately $29.8 billion, quite a nice figure to hear as we grasp onto the holiday shopping season.

The convenience of gift cards is fantastic for both the gift giver and receiver.  But as easy as it is to purchase a gift card and be nice on the receiving end to get one, it comes with some potential high-risk opportunities for scammers to take advantage of innocent consumers.

There were 3 gift card scams identified by Threat Metrix the Advanced Cybercrime Prevention Solutions Company.

Recent holiday gift card fraud scenarios include:

• Stolen Gift Card Web IDs – In this Scam “Cybercriminals fraudulently gain access to virtual gift cards, also known as eCerts, and buy goods and services that are then resold either outside the country or on auction sites,” stated ThreatMetrix

• Virtual Goods – “The gaming industry is thriving. Taking advantage of the possibilities it offers, cybercriminals steal online currency and virtual goods such as extra lives, levels, and customized video-game features. With the release of two big-name video game systems – PS4 and Xbox One – this will be a hot racket this holiday season,” noted ThreatMetrix.

• Purchasing Gift Cards with Stolen Credit Cards – And finally in this situation “Using stolen credit card numbers, cybercriminals purchase gift cards online or in-store to buy physical goods, eg., clothing, and electronics. Then they turn around to sell the goods online or ship them for sale abroad,” ThreatMetrix said.

“If merchants fail to put preventative measures in place to protect against gift card fraud, it can be one of the greatest sources of revenue loss for merchants,” stated Carmen Honacker, Director of Customer Advocacy at Threat Metrix, in a press release about gift card fraud. “Gift card purchases using stolen credit cards have become so prevalent that some retailers have resorted to ceasing online gift cards altogether and only accepting cash in-store for gift cards.”

Now just because criminals see gift cards as a lucrative target, doesn’t mean that merchant account retailers have to shine away from selling them.  “Retailers don’t need to miss out on these revenue opportunities due to the risk of cybercrime. With effective strategies and technologies in place to differentiate between authentic and fraudulent transactions, retailers can continue selling gift cards via credit card transactions and drastically decrease fraud attempts,” said Honacker.

Using the right collected information helps merchants tell the difference between authentic and suspicious gift card transactions.  “Each merchant has different requirements for categorizing risk,” said Honacker. “While The Network may generally set certain locations, as high risk, a given retailer may receive significant business from that location and can adjust the risk levels.”


If the retailer flags the gift card as high risk, the retailer will then recommend that the merchant do additional screening before accepting any transaction. This, in turn, will further protect both the retailer and consumer, which eMerchantBroker the #1 high-risk merchant processor can help you out with.

Don’t detour from getting those gift cards your friends and family enjoy receiving because of potential scams. Like everything in life, you have to be aware of the risks involved, so enjoy the holiday season, and may you prosper well into the New Year.

Looking for a merchant account? is ranked the #1 high-risk processor in the country by top credit card processors and can help you get started today.

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Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

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