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Data for today’s episode is provided by Mercator Advisory Group’s Viewpoint: Gift Card Fraud: Trends and Mitigation
Gift Card Fraud Trends of 2020:
- According to the FTC, gift card fraud is growing by both the number of cases and total financial losses.
- Gift card financial losses reported to the FTC totaled $124 million in 2020.
- This is 17% higher than 2019’s $103 million in reported gift card losses.
- Over the same period, the number of cases increased from 38,400 to 99,900.
- 26% of individuals who reported losing money to a scam in 2020 used gift cards to pay the scammer.
- Mercator Advisory Group found that prepaid cards experienced the most significant growth in fraud between 2019 and 2020.
Fraud has always been a challenge for the gift card market, and recent years have seen an increase in gift card fraud in terms of both the number of cases and total financial losses. Despite this trend, recent advances in technology are helping in fraud prevention and detection, and future iterations are likely to prove still more useful. By incorporating artificial intelligence and machine learning tools into their arsenal of fraud services, merchants can make their defenses more robust and adaptive. With the use of advanced technology, it is increasingly possible for gift card fraud to not only be detected but prevented altogether.