Gift Card Fraud By Employees Rises; Cards Are Like Currency


Employee fraud involving gift cards appears to be growing sharply as retailers struggle to contain overall theft estimated at $36 billion a year, or 1.51 percent of retail sales, says a study reported by the New York Times. Even as total sales have been falling, employee theft and shoplifting have been rising, with occasional arrests making headlines. “Gift card fraud is spiking,” said Joshua Bamfield, author of the Global Retail Theft Barometer, an annual international survey of retailers. “To employees, this is like currency. It's almost as good as the U.S. dollar.”

Many of the gift card crimes are straightforward, frequently involving young sales clerks. Cashiers often do fake refunds of merchandise and then, with the amount refunded, use their registers to fill gift cards, which they take. Sometimes when shoppers buy gift cards, cashiers give them blank cards and then divert the shoppers' money onto cards for themselves. At the Saks flagship store in New York City, a sales clerk, 23, was caught ringing up $130,000 in false merchandise returns and siphoning the money onto a gift card.

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