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Preventing Gift Card Fraud at your Restaurants

Posted by Mirus Team

Do you like receiving a gift card in lieu of something more personal?  An increasing number of Americans do.  The continued popularity of gift cards is on the rise with Starbucks reporting a whopping third of total sales from gift cards in the fourth quarter of 2013.  That's $1.4 billion to be exact.   


With that much profit on the line, the risk gift card fraud poses is greater than ever for retailers and restaurants alike.  Suddenly diners don't have to be so sneaky when an inconspicuous card will "dine and dash" for them.  Raising the stakes even higher, thieves continue to devise increasingly sophisticated methods to perform a very simple objective : ripping you off.  Unfortunately, you don't have to look any further than your own employees when it comes to the majority of gift card theft. 

According to Loss Prevention Innovations, here are the most popular ways employees gift themselves with your profits using gift cards: 

"The Switch"

     "An employee receives a gift card as payment from a customer.  The card after purchase still has a balance.  The employee switches the card with a zero balance card lying by the register.  The customer leaves with a zero balance card, and the employee takes the customer's original card with the remaining balance.  


     An employee rings the purchase of a gift card on Register #1 for $100.  They complete the purchase, but do not put any money in the register (no customer is present).  They go to Register #2 and purchase two $50 gift cards, using the gift card of $100 as tender.  They then go back to Register #1 and void the original sale.  They now have two "clean" $50 gift cards they paid nothing for.

Register Shut Down

     An employee rings up a gift card and activates it at the point of purchase.  Before tendering the transaction, they either unplug or conduct a hard shut down of the register.  Did the gift card activate?  Was the transaction recorded?  Some restaurants have lost thousands because of this method before realizing what was occurring.

Stealing the Numbers

     Like credit cards, some organized thieves get their hands on the gift card numbers (in collusion with employees) and replicate gift card "mag stripes", thereby making a duplicate of the gift card.  Using it or selling quickly, the card gets into play and the first to use it is normally the thief." - Loss Prevention Innovations

Luckily for our customers, Mirus is a step ahead of methods employees like to think are clever and even original.  



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