Hi, I'm Shelley Hunter. Since 2009, I've been the voice of the consumer in the gift card industry. What started as a creative endeavor—helping people transform gift cards into personalized, thoughtful gifts—has morphed into a battle against a growing criminal enterprise. This enterprise uses outdated gift card technology and misplaced objectives to launder money and fuel activities, including human trafficking, elderly exploitation, and other financial scams.

The information I'm about to share isn't just to educate you—it's a call to action for consumers, the media, innovators, lawmakers, and every business involved in the gift card industry.

But let me be clear. I'm not doing this to point fingers or be critical of any one organization. My hope is that you'll listen, learn, and join me in a collaborative effort to reform the gift card industry.

Make no mistake—it will take change on everyone's part--especially us consumers. But with untold millions or even billions of dollars lost each year to gift card scams, and that money being used to victimize people all over the world, I believe that people in this country are willing to take a few extra steps at the cash register to stop that from happening.

In this video, I'll share three critical things you need to know to be part of the solution.

You need to understand the simple mechanics of how gift card fraud works. It is shockingly simple.
What businesses must do to protect consumers
And where lawmakers can step in to compel compliance.

And if you're wondering whether I still love gift cards, the answer is yes. Done right, gift cards far surpass the old hassle of shopping for hours, overspending on that perfect gift, and dealing with returns or unused presents. They simplify giving, letting recipients choose exactly what they want. But the technology and processes that fuel our current gift card system needs a refresh, so here we go.

How Gift Card Fraud and Scams Work - It's simple.

There are various methods scammers use to steal the value from gift cards, but they all include 3 things:

Funding the gift card with someone else's money
Obtaining the activated gift card number
Redeeming the gift card before anyone finds out

I'll explain.

There are many ways scammers get people to load THEIR OWN money onto gift cards. First, is the regular gift card givers like you and me--without knowing it, we may be buying compromised gift cards that scammers previously took off the racks, opened to get the card numbers, and placed back on the racks. Second are victims of gift card payment scams--whether it's someone told to buy gift cards to avoid an IRS fine, get a virus off their computer, collect money from a sweepstakes, help a new facebook friend with a medical bill, and more. There are many many ways people are coerced into buying gift cards, but the goal is always to get someone else to put money on a gift card. That's step 1.

Step 2 is that scammers need the actual gift card numbers. If they previously took the cards off the racks, the scammers already have the numbers, they use bots to check the balances of the cards and will get an alert when someone buys a compromised card. If it's a gift card payment scam, they'll instruct the victim to buy the gift cards then open the packaging and read the card numbers to them. I know it sounds really simple to detect, but you have to know that these scammers are well versed in manipulative tactics that play on people's emotions. And we now know that often the scammers themselves are being trafficked, so their lives may also depend on how much fear they can instill in a victim. Scammers also create fake websites to trick people into entering their gift card numbers. It's a lot. But again, the goal is to get the numbers. That's step 2.

At this point, the scammers know money is on the card and they have the card numbers. But guess what... in general, you can't redeem a gift card for cash. The gift card must be redeemed to access the value. So step 3 is liquidating the gift cards. Scammers either redeem the gift cards for products they can easily resell, like sneakers or electronics, or they sell the gift card numbers on the dark web where quick, anonymous transactions are the norm. They may even sell the gift cards in broad daylight on social media or online auction sites. The new holder of the gift card number will then quickly redeem it themselves.

This entire process unfolds in minutes, making it exceedingly difficult to cancel or reverse the transactions IF the scam is even discovered.

Why so easy? Because gift cards are an anonymous form of payment--we don't track who buys or redeems them. So it's an ideal way to steal and launder money.

So to recap:

Scammers get someone else to load funds on to gift cards
They get access to the gift card numbers
Then they redeem the cards for products they can resell or sell the numbers to someone else to use.

With the system being so obvious, you'd think it would also be easy to solved. To date, the response has been for consumers to inspect cards for tampering and heed scam warning signs. And expecting cashiers in busy retail environments to perform all of the normal customer service duties while also scrutinizing each gift card purchase for potential fraud. This manual approach is unmatched for the sophisticated technologies fraudsters use.

So what can we do?

Businesses and innovators need to address the inherent vulnerabilities that scammers exploit. In my view, it's time we reduce the anonymity that fuels money laundering, connect cards to customers, and retool the technology we use.

I understand the hesitancy some stores have regarding the implementation of new technologies. Changes to point-of-sale systems, adding steps to the purchasing process, the costs of upgrades, and the loss of revenue from unused anonymous gift cards are significant concerns. However, we've already seen successful adaptations in retail for other reasons.

For example, the introduction of chip-enabled credit cards, tap-to-pay, and mobile payment options like Apple Pay were all integrated when there was a clear financial incentive or legal requirement. Similarly, regulations that require certain cold medicines to be sold under stricter controls to combat meth production have shown that substantial change is possible when public safety is at stake. These medicines now require a photo ID for purchase, with transactions tracked in real-time databases to prevent abuse.

We should do the same for gift cards.

As an everyday shopper, I don't have a problem showing my driver's license to buy cold medicine if that's what it takes to stop the meth epidemic. And I don't have a problem giving my ID when buying gift cards to stop money laundering. This is just one example of using technology to detect and prevent fraud. There are others. I know of other viable technologies that could revolutionize the way we activate, gift, and redeem gift cards, effectively curbing fraud. Still, implementation requires cooperation from the businesses that sell gift cards. And I empathize with them. I acknowledge that changing how cards are handled will involve costs. But people's lives are literally at stake thanks to the misuse of our current gift card system.

And here's the irony. Shifting away from anonymity and leaning into traceable transactions gives businesses more opportunities for customer engagement. Data shows that people typically spend more than the value of their gift cards. A system that connects more closely with gift card users can foster trust and loyalty while enhancing security. In other words, there's more money to be made by encouraging gift card redemption than simply keeping the value from gift cards that don't get used--a loophole that currently only works for businesses if they don't know who the gift card owners are. (That's a whole other discussion).

Finally - what can lawmakers do?

Current regulations leave gift card-related fraud largely unprotected, unlike the safeguards that exist for credit and debit card fraud. As awareness among lawmakers increases, so does legislative action. However, these efforts often miss the mark. For example, a new law in New York requires stores to display warnings about gift card scams. While providing information is helpful, it's not a comprehensive solution. It might raise awareness but does little to prevent the actual act of fraud. Maryland just passed a law mandating tamper-resistant packaging for gift cards on displays. This may work temporarily, but it still burdens cashiers and customers with inspecting packaging manually and doesn't address the fact that scammers are continually improving their tempering techniques. We’re just not getting to the root problem.

The path forward requires lawmakers to guide the gift card industry towards embracing innovative solutions such as AI, machine learning, advanced digital apps, and other technologies that enhance security and improve the consumer experience. As we advance into a more automated and data-driven era, legislation could evolve to provide clear, enforceable standards that ensure consistent protection against gift card fraud across all states—not 50 different solutions or no solutions at all.

So, what can you do?

If you're a consumer, remain vigilant about where you buy your gift cards. It's often safer to purchase directly from stores or restaurants that redeem those cards. You can also buy online, where the risk of card tampering is reduced. Be cautious about any instructions to buy gift cards for payments—remember, gift cards have to be redeemed so they can't be used for payment. For more tips and to find trusted vendors, visit GiftCardsYouCanTrust.com, where you'll gift card issuers that joined my certification program, giving me the chance to vet their processes, ensuring their gift cards are secure, easy to use, and well-supported.

If you're a merchant—whether a store, restaurant, or gift card seller—visit GiftCardReform.com. You can sign up for my newsletter, contact me directly, or join my certification program. I'll work with you to ensure your gift cards provide the best customer experience, enhancing security and trust. It’s good for customers and for your business.

If you're an innovator, keep pushing forward. I meet many who share their solutions and there are truly promising ideas out there. We need to show the gift card industry that the benefits to their business and humanity far outweigh implementation costs. Seriously—there are some solutions I would love to see.

And if you're a lawmaker, please also reach out on GiftCardReform.com. I've spent years trying to help consumers without alienating the gift card industry for fear of professional repercussions. But I can no longer stay silent. Let me know if you’re ready to make a difference and you are willing to take a meeting.

Bottom line—the problem of gift card fraud is complex, but the solutions are straightforward and AVAILABLE. It’s time for a united effort from consumers, businesses, and lawmakers to implement these solutions immediately.

Thank you for watching, and joining me in this effort.

Happy Gifting.