How companies can arm themselves against gift card fraud

In the highly competitive job market, companies need to increase their attractiveness in order to retain employees and find new specialists. The obligatory fruit basket hardly attracts anyone from behind the stove. New, innovative ways of rewarding that reach every employee personally are therefore in demand. Gifts in kind and other benefits are very popular, as they are often more cost-effective than a direct salary increase.

Gift cards and vouchers are particularly flexible. There is a wide range on offer and the market for providers of non-cash benefits is flourishing. At the same time, however, the number of dubious players is also increasing. They are targeting physical and digital cards in equal measure. 

Professional protection for gift cards

Trust is the most important element of a gift card - after all, everyone involved must be able to rely on the cards issued to function securely. In addition to the monetary loss, fraud also results in a loss of trust.

According to a BHN survey, 73 percent of consumers have heard of these scenarios, and as many as 34 percent have been victims of fraudsters themselves. Certain patterns emerge when these cards are used. In some cases, the data is provided with features that do not correspond to legitimate use. 

In order to better recognize these fraudulent patterns, BHN has put together a team of data scientists and invested in machine learning algorithms. In the backend of the global provider network, risk management tools check every transaction for possible fraud, and unusual activity is analyzed immediately. Scientists and risk management tools then jointly decide whether a transaction could be fraudulent.

Packaging as a gateway 

Another measure is the development of forgery-proof packaging on which important card information is stored. The BSI also recently warned that the barcodes on gift cards are increasingly being manipulated. The money paid in then does not end up in the digital gift account, but in the money store of fraudsters. The card cannot be redeemed, which causes lasting damage to the reputation of the gift giver.

The most well-known type of gift card fraud is telephone fraud. Around 25 percent of reported incidents are attributable to this scam. This involves gift card holders being asked over the phone to transfer a fee before redeeming the card. Other fraudsters ask for the sensitive card details on the receiver for an alleged activation and transfer the credit to their own account. 

Through training and special educational measures, retailers and consumers can be made aware of possible fraud patterns. Customer support is an important criterion for any type of fraud. A well-trained service team provides initial assistance, informs those affected about possible measures and answers questions. However, you can also take action yourself and share the scams of gift card fraudsters with others. It is a good idea to post experiences on social media channels to draw attention to manipulation. In companies, this information can also be disseminated via employee newsletters or internal notifications. 

Companies that opt for a bonus program based on gift or prepaid cards should check the integrity of their incentive partners. The larger the market, the more attractive it becomes for fraudulent players. Cooperation with an experienced external partner helps to distinguish between serious and dubious offers. Specialists also provide support from the outset in tailoring an employee incentive program to the individual needs of the company and its employees. This creates a flexible and attractive portfolio that retains existing staff and attracts new specialists.

About the author: Leif-Eric Marx, Managing Director DACH & CEE at BHN.

Source: www.blackhawknetwork.com