Prepaid and gift cards have become increasingly popular as convenient financial tools and versatile gifting options. However, their widespread use comes with a distinct set of challenges and potential risks that consumers must consider. From vulnerabilities like theft and unauthorized usage to the complications of expiration dates and hidden fees, what are the issues consumers have to consider?
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Data for today’s episode is provided by Javelin Strategy & Research’s Report: Mitigating Risk in Prepaid Card Programs
Top 3 Security Issues and Lost-Value Risks When Using Prepaid/Gift Cards
- 44% – Loss of funds due to expiration of card
- 43% – The card becoming lost or stolen
- 34% – Inability to access the prepaid balance at the time of use due to technical issues
About Report
Risk in any business is inevitable. Prepaid card programs start with risk as soon as the financial liability of a card appears on the balance sheet. From the time of issuance, all parties in the value chain must be aware of the many risks associated with that liability and understand how best to mitigate them, knowing that eliminating risk is an impossibility.
The risks start with the seemingly simple task of understanding customer sentiments and managing their expectations. However, that is much more difficult than it appears. Other risks include store policies, theft scams, and fraud, the successful management of which compounds into ensuring customers feel secure in their purchases. Strong back-end technology and policies create an overlying, invisible shield that helps further reduce risk to acceptable levels.
