Gift Card Fraud Statistics & ImpactWhat’s Good for Scammers is Bad for Cardholders… & Even Worse for Merchants

Guy Harris | July 14, 2025 | 2 min read

Digging into the Stats & Sources of Financial Losses Resulting From Gift Card Fraud

The most obvious cost of gift card fraud is the direct financial hit — money vanishes and goods walk out the door.

But that’s just the beginning. Every time a scammer steals from you, legitimate customers may lose trust in your brand, leaving you with the operational hassle of handling cardholder complaints and dealing with chargebacks.

$250

million

in consumer losses came from gift card scams in 2024.

Source: The Journal-Courier

25%

roughly

of all fraud complaints filed with the FTC in 2024 were related to gift card fraud.

Source: Federal Trade Commission

364%

increase

reported losses linked to gift card fraud surged that much from 2018 to 2021.

Source: Paladin Data Corporation

34%

of US adults

said they or someone they know had been targeted by gift-card-based scams.

Source: AARP

1 in 4

people

targeted by gift card scams ended up giving scammers the requested information.

Source: AARP

$1B

in losses

came from gift cards tampered with before purchase between 2019 and 2023.

Source: Federal Trade Commission

A Real-World Look at Chargeback Management

Based on a survey of over 400 merchants, the report presents a comprehensive, cross-vertical look at the current state of chargebacks and chargeback management.

Access the FREE Report

Financial & Operational Consequences of Gift Card Fraud

The figures I provided above are pretty intimidating. But, they don’t necessarily give you the fullest picture of the scale of the problem.

The most obvious consequence of gift card fraud is that it deprives merchants of the revenue they would’ve otherwise earned from legitimate cardholders who would’ve made genuine, non-fraudulent purchases.

The direct losses are just part of what’s at stake; there are much more far-reaching consequences of gift card fraud to think about, too. Below, I’ve outlined a few of the ways these attacks can erode your profitability and reputation over time:

Customer Trust & Brand Reputation Damage

Most gift card holders who are victims of third-party fraud are going to assign at least part of the blame to the merchant or retailer the gift card is associated with.

It’s not fair. But, even if you take every precaution against gift card fraud, you may still be blamed for adverse outcomes. Worse, disgruntled customers may spread negative word-of-mouth about your business, which could harm your reputation and future prospects.

Higher Processing Fees

If your gift cards are the target of routine and ongoing fraud, you could invite added scrutiny — and potentially higher payment processing fees — from payment processors.

Some processors may charge preauthorization fees for every transaction. Even if the purchase ultimately ends up being fraudulent and the payment fails to go through, you’d still get dinged for the added fee.

Operational Overhead

Every dollar lost to fraud ultimately cost US merchants $4.61 to identify, manage, and resolve. That’s because gift card fraud losses don’t end with lost revenue, inventory, or even chargeback fees.

Well after the fraudsters have disappeared, merchants will still need to spend significant sums of money on investigations, customer service, and fraud prevention tools.

Gift Card Fraud

Gift Card Fraud Statistics & ImpactWhat’s Good for Scammers is Bad for Cardholders… & Even Worse for Merchants

Digging into the Stats & Sources of Financial Losses Resulting From Gift Card Fraud

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