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Holiday Gift Card Spending Will Reach All-Time Highs — Leading to Increased Cybercrime Risks

Posted November 25, 2013

ThreatMetrix Warns of Several Fraud Scenarios Associated with Gift Cards During the Holiday Shopping Season

San Jose, Calif. – November 26, 2013 – ThreatMetrix™, the fastest-growing provider of integrated cybercrime solutions, announced several fraud scenarios associated with holiday gift cards, as cybercriminals seek to make a profit from the lucrative market this time of year. According to a recent survey from the UK Gift Card & Voucher Association (UKGCVA), half of the consumers that celebrate during the holiday season would prefer to receive a plastic gift card. This trend leads directly to an increased risk of cybercrime.

“Cybercriminals have developed several highly sophisticated ways to compromise gift cards and take advantage of consumers during the upcoming holiday shopping season, when merchants are often too busy with a high volume of transactions to spot all suspicious activity,” said Carmen Honacker, director of customer advocacy at ThreatMetrix. “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.”

Holiday Gift Card Fraud Scenarios

There are several advanced scenarios associated with holiday gift card fraud, all of which can lead to severe losses for the merchants and compromised customer account data. These scenarios include:

  • Stolen Gift Card Web IDs – Cybercriminals fraudulently gain access to virtual gift cards and purchase goods and services that are then resold for profit outside the country or on auction sites.
  • Virtual Goods – Fraudsters take advantage of the thriving gaming industry to compromise online currency and steal virtual goods – such as extra lives, levels and customised features in video games – for personal profit. This will be especially prevalent this holiday season with the release of two big-name video game systems – PS4 and Xbox One.
  • Purchasing Gift Cards with a Stolen Credit Card – Using a stolen credit card number, cybercriminals can purchase gift cards either online or in-store. Physical goods such as clothing and electronics are then purchased with the stolen cards and sold online or shipped abroad and sold at a higher price for profit.

“Gift card purchases using stolen credit cards have become so prevalent that some retailers have stopped offering online gift cards altogether and only accept cash in-store for gift cards,” said Honacker.

“However, retailers don’t need to miss out on these revenue opportunities since there are effective strategies and technologies available that can differentiate between authentic and fraudulent transactions. Now, retailers can continue selling gift cards via credit card transactions and drastically decrease fraud attempts.”

The ThreatMetrix™ Global Trust Intelligence Network (The Network) helps merchants differentiate between authentic and suspicious gift card transactions. With billions of transactions in its data repository, The Network can determine in real-time if any given account, device or persona has been flagged in the past for masking its true location, stealing gift card PINs, selling stolen goods or other fraudulent activity. The Network can flag these transactions as high risk and recommend the merchant add additional screening before accepting the transaction.

The holiday shopping season is the busiest time of year for gift card purchases and retailers need advanced strategies in place to assure cybercriminals are stopped in their tracks and authentic customers are not disrupted by arduous authentication processes. ThreatMetrix is committed to continuously developing new technologies to assure retailers and other businesses across industries have all the tools they need to protect against cybercrime.

About ThreatMetrix

ThreatMetrix secures Web transactions against account takeoverpayment fraudidentity spoofing, malware, and data breaches. The ThreatMetrix Global Trust Intelligence Network, which analyses 500 million monthly transactions, provides context-based authentication and Web fraud prevention to help companies accelerate revenue, reduce costs and eliminate friction. ThreatMetrix protects more than 1,900 customers and 9,000 websites across a variety of industries, including banking, enterprise, e-commerce, payments, social networks, government, and insurance. For more information, visit or call 1-408-200-5755.

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Press Contact

Lynn Strand
Director of International Marketing
Skype: lynnstrand

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