How to Avoid Gift Card Fraud with Intelligent Detection and Proactive Security Protocols

Gift card fraud is a long-established cybersecurity vulnerability that exploits technology and human psychology. With gift card scams getting trickier to spot, security experts acknowledge the full extent of implications if such threat actors are to succeed.

Cybercriminals now have access to uncensored AI like GhostGPT. These powerful tools have made sophisticated scams readily available, which is why businesses should stay vigilant.

In this blog, we explain how these scams work, their real impact, and how CISOs can educate their team.

Gift card fraud refers to the use of gift cards as a cash equivalent to commit fraudulent activities. So, how does the gift card scam work? Modern gift card fraud comes in many forms, with the most common being:

• Physical gift card tinkering

• Buying gift cards with stolen credit cards.

• Stealing gift card numbers

• Social engineering and phishing

• False refunds

The reality is painful: Consumers reported losing $217 million to gift card scams in 2023, with a median loss per victim around $500, according to official FTC data.

Criminals target gift cards because they provide anonymity, quick cash conversion, weak verification, high liquidity, and remain stubbornly difficult to track. In fact, the FTC reports gift cards have become fraudsters' preferred payment method.

Most gift card transactions are digital, allowing criminals to adapt rapidly to defensive measures. Criminal organizations even offer sophisticated "phishing-as-a-service" operations centered on exploitations like gift card scams.

Email gift card fraud typically begins with either:

• Targeted phishing emails

• Elaborate impersonation attempts

Both create multilayered security challenges.

Impersonation attacks are particularly dangerous, bypassing traditional security and exploiting established trust relationships.

Social engineering in gift card scams involves manipulating people through deception to divulge confidential information or take actions that benefit the scammer.

Attackers use such deceptive techniques to extract gift card information or manipulate victims into purchasing cards by:

• Engineering fake emergencies to force quick, unverified action.

• Deploying convincing spoofed emails that mimic legitimate business communications.

• Claiming fake prizes and large checks to be received.

Impersonation attempts, like executive impersonation, are serious risks, as they open doors to scammers. If one fraud attempt is successful, others can follow.

For example, a Danish-language BEC attack impersonated a company CEO to request the purchase of iTunes gift cards. Most employees who receive similar emails may instinctively comply as the communications came from an authoritative person who requested urgency.

Account takeovers, vishing, and smishing might be subsequent and result in more devastating consequences.

Gift card email scams cause business damage far beyond immediate monetary losses

Reputational damage, eroded customer trust, and regulatory complications are other common consequences of successful cyberattacks.

Gift card fraud creates serious compliance challenges. Undetected cases lead to inaccurate financial reporting, triggering audit complications and potential Sarbanes-Oxley violations.

Public companies face additional SEC scrutiny and possible shareholder litigation.

The reputational impact often exceeds the financial losses:

• Media coverage of fraud incidents erodes brand trust and customer loyalty.

• Competitors capitalize on security failures to attract your customer base.

These reputational impacts reverberate throughout the business:

• Marketing costs increase as organizations combat negative perceptions.

• Employee morale suffers, particularly among customer-facing teams.

• Business partnerships become strained, constraining growth opportunities.

As stealing gift cards grows more sophisticated, gift card fraud protection measures aren't optional extras. Rebuilding trust after gift card scams and threat vectors as a whole requires a significant investment of time and resources.

As gift card scams found by security experts are increasingly complex, identification mechanisms must retaliate with equal strength. Using AI, automation, and behavioral AI analytics outpaces attackers.

AI anomaly detection identifies suspicious activity in real-time by analyzing:

• Emails where attackers request gift card purchases as a form of financial extraction.

• Sudden shifts in internal communication style.

• Geographic anomalies and impossible travel indicators.

The key advantage? These AI systems automatically flag the activity, continuously improve without manual tuning, and adapt to emerging gift card fraud patterns as they develop.

Machine learning excels at identifying risks before fraudulent gift card purchases occur. By learning the normal behavior of every employee based on sign-in patterns, location, devices, and browsers used, behavioral AI pinpoints impersonation attempts before gift card fraud happens.

Organizations using behavioral AI as a phishing defense more often avoid scams, as their signals are easily detected when incoming emails are investigated.

Incorporating gift card-specific threat intelligence into security workflows allows:

• Importing of known scam domains and phishing indicators into email security controls.

• Updating fraud monitoring systems with emerging gift card cash-out patterns.

• Sharing threat data across organizational boundaries to improve collective defense.

Then, a real-time system can automatically block, alert, or generate tickets when known gift card fraud indicators appear.

With AI tools correlating internal patterns with external threat feeds and known data breaches, accuracy is improved, and false positives are reduced, for better gift card theft detection.

To stay protected, integrate a flexible, proactive security strategy that covers gift card security into your cybersecurity architecture.

Since gift card fraud often begins with social engineering, use AI to ensure communication and collaboration tool security:

• Identify linguistic themes characteristic of gift card scams.

• Detect writing style deviations from established communication patterns.

• Automatically quarantine messages containing urgent gift card requests from unfamiliar senders.

Modern AI goes beyond simple keyword matching. To differentiate legitimate requests from attacks, all relevant data is analyzed and interpreted.

And with inbound email security software, IT managers can examine sending patterns, relationship history, and linguistic indicators in minutes instead of hours.

Counter gift card attacks automatically by:

• Implementing dedicated detection and protection for either Microsoft or Google.

• Applying intelligent mailbox security for suspicious activities.

• Using an AI phishing coach to train your team on dealing with threats.

AI not only helps distinguish between legitimate requests and malicious activity but also alerts and intervenes in real-time.

Speed is critical when responding to gift card fraud. Malware link detection capabilities with automated response workflows can:

• Block suspected links to limit damage.

• Act immediately, especially if API-first solutions are used.

• Alert security teams through established channels.

When AI detects subtle anomalies in inbound email patterns, these automated playbooks can initiate containment actions before traditional systems even register the threat.

These practices create layered defenses against gift card fraud that adapt as attack techniques evolve.

As scams evolve, innovative defense mechanisms guarantee adequate gift card fraud protection:

• AI anomaly detection

• Automated behavioral analysis

• Threat intelligence

• Rapid response capabilities

Security teams need a dynamic security posture that adapts to emerging threats. But technology alone can't solve this problem.

A complete strategy requires strong employee education to combat social engineering and prevent the theft of gift cards.

Abnormal stays ahead of gift card fraud (and more) using an advanced threat detection and remedy ecosystem that acts as soon as threats reach your business, minimizing potential impact.

See for yourself how Abnormal AI can strengthen your defenses against gift card fraud and other emerging threats.

Book a demo today.