The hidden cost of gift card fraud: why retailers can’t afford to ignore it
The headline numbers are significant. According to Report Fraud data covering 2023–2024, over £18.5 million was lost to gift card fraud in the UK. Action Fraud received 6,229 reports in 2023 alone. But the figures that appear in the press represent only what gets reported, and they say nothing about the costs that never make it onto a balance sheet.
The Direct Financial Loss
The most visible costs are chargebacks, refunds, and the expense of replacing compromised cards. When a customer presents a zero-balance card received as a gift, the retailer often absorbs the fallout: refund or replacement, investigation time, and often a fee from the payment provider.
In the United States, the Federal Trade Commission has reported gift card fraud responsible for over $217 million in losses, a figure that illustrates the scale of the problem beyond UK borders and the commercial exposure for any retailer operating at volume.
The Operational Cost
Resolving a gift card fraud dispute is rarely straightforward. It typically involves multiple teams: store operations, customer services, finance, and often an external payment partner, each requiring documentation, communication, and sign-off. The fraud is notoriously difficult to trace back to a specific point of compromise, which extends investigation timelines considerably. Every hour spent on dispute resolution is an hour not spent on trading, planning, or growth. For multi-site retailers managing large gift card programmes, that diversion of resources accumulates quickly.
The Reputational Cost
A single high-profile fraud incident can surface in negative reviews, social media posts, and mainstream press coverage before a retailer has had the opportunity to respond.
Retailers have featured in press reports relating to gift card fraud, not because of any systemic failure on their part, but because the issue is visible and consumer-facing. The reputational risk is sharpened by one particular dynamic: gift cards are often given as presents. The recipient who discovers an empty card is not just disappointed, they are embarrassed. Their first association with a brand may be a deflating, confusing experience, one they are likely to share.
The Cost of Inaction
According to the GCVA State of the Nation 2025 report, 96% of gift card managers cite fraud as a critical concern. More tellingly, 76% report that their customers share that concern. Shopper awareness of gift card fraud is growing, driven by press coverage and social media.
A retailer whose packaging does not visibly address the issue risks losing consumer confidence even before a fraud event occurs. The question for procurement and marketing teams is not whether fraud will affect the programme, it is whether the programme is equipped to handle it.
Prevention as an Investment, Not a Cost
Addressing gift card fraud is not an overhead, it is a protection of revenue, customer relationships, and brand equity.
Certus Card Group offers a scalable range of solutions, from barcode concealment labels through to the fully tamper-evident PaperBurstTech® featuring SecureAssure, designed to match the right level of protection to the size and risk profile of each programme. The cost of prevention is predictable. The cost of a fraud event is not.
Find Out More
To explore which security tier is right for your gift card programme, book a consultation with the Certus Card Group team.