Introduction

Gift cards are popular among consumers because they are easy to use in-person or online, can be purchased almost anywhere, and allow the recipient to spend on products of their choice. But these qualities make them equally attractive to scammers, and gift cards represent one of the most common avenues criminals use to defraud consumers.

Americans reported more than $233 million in losses related to gift card fraud in 2021. This number will only continue to grow if policymakers, retailers, and gift card issuers fail to take action to protect consumers. This report outlines practical solutions that policymakers should adopt to address growing levels of gift card fraud. They include:

• Congress should update the EFTA to treat gift cards like debit cards, which would encourage companies to implement proven security features to protect against liability.
• The FTC should modernize its education campaign by working with industry to introduce warning messages on point-of-sale devices to increase awareness of gift card scams.
• The FTC should launch a data-sharing pilot program designed to increase the number of data contributors to its Consumer Sentinel Network—a repository of consumer complaints—to better track gift card fraud.
• The FTC should break out data for payments by virtual, mobile, and physical gift cards on Sentinel.

Read the full report. (PDF)