Gift Card Fraud

Gift card fraud bots systematically brute-force or test random gift card numbers to identify active balances. Attackers use automation to rapidly cycle through potential card combinations, exploiting weak validation systems that do not enforce rate limiting or CAPTCHA protections. Once a valid gift card is found, fraudsters either use the balance for purchases or sell the stolen gift card details on illicit marketplaces. This form of attack is particularly common against e-commerce platforms, digital wallet services, and retail gift card providers.

Impact

Gift card fraud results in direct financial losses for retailers, as stolen balances often cannot be recovered. Additionally, businesses face an influx of customer complaints, as legitimate buyers discover their gift cards have been drained before use. Support teams experience higher workloads, dealing with refund requests and disputes, leading to increased operational costs. Over time, if gift card fraud remains unchecked, consumer trust declines, and retailers may be forced to limit or discontinue gift card programs altogether.

Example

A retail website offering digital gift cards begins seeing unusual login activity on its gift card balance-checking page. Attackers have deployed bots to test millions of potential gift card codes, looking for active balances. Once valid cards are found, fraudsters either spend the stolen funds immediately or sell them at a discount online. Customers attempting to use their gift cards later discover their balances have already been used, leading to disputes and negative brand perception.

Mitigation

To prevent gift card fraud, businesses implement rate limiting, CAPTCHA protections, and fraud detection algorithms to block automated testing of card numbers. Transaction monitoring and anomaly detection can help identify suspicious redemption patterns. Retailers can also require user authentication before checking or redeeming gift card balances, making it harder for attackers to exploit vulnerable systems. Regularly refreshing gift card number generation methods adds an extra layer of security against brute-force attempts.