Just in time for the holiday gift-giving season, Target is redesigning its Target GiftCards to prevent tampering before it starts. Following a Maryland law that passed earlier this year, aimed at cracking down on gift card fraud, Target is one of the first major retailers to overhaul its gift card system.
According to Target, traditional gift cards have access codes printed on the back, which criminals can steal before the cards are sold, allowing them to drain the funds even after the purchase. Going forward, the new cards will feature a blank space where the codes once appeared, and at checkout, a team member will apply a security access label to further reduce the risk of fraud.
The redesign comports with a law that went into effect in Maryland over the summer, mandating tamper-proof packaging for most gift cards sold in person. The bill also requires mandatory employee training to help them detect tampered cards. The law will take full effect on October 1, 2025.
It was anticipated that major retailers would design cards to adhere to the Maryland standards, regardless of where the cards are sold.
“You can’t avoid making these changes almost universally, because you don’t want to have one process for Maryland and another for everywhere else,” said Jordan Hirschfield, Director of Prepaid at Javelin Strategy & Research. “From my conversations with people in the industry, the reality is they probably didn’t need the legislation anyway. They’re all seeing the trends of tampering, and they want to be proactive about it. Everyone that I’ve spoken with in the industry is wants to make this a better, more secure purchase experience.”
A Sizable Target
Target has long been a target for gift card fraud. According to one arrest report, Target’s corporate office alleges that the retailer has lost about $300 million to gift card fraud over the years. Last holiday season, police in Virginia arrested two men who were stocking the shelves with altered gift cards in a Target outlet. They were later found to be in possession of nearly 1,000 Target gift cards.
“Remember, gift cards hold no value until they’re purchased and activated,” said Hirschfield. “Retailers want to show that they can have better packaging while also making it easier for that retail clerk who is not trained in gift card fraud to notice that something has been tampered with and say, ‘I’m going to remove this one. I’ll get you a different one.’”
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