Next-Generation Gift Cards That Keep on Giving

A New Digital Security Layer Unlocks More Beautiful, Sustainable, Cost-Effective Cards That Restore Trust and Boost the Bottom Line

In a world where consumers crave meaningful gifts, today’s gift cards often fall short. They promise convenience and choice, but frequently arrive in bulky, utilitarian packaging that screams “security measure” more than “thoughtful gesture” or “I love you.” 

But rising fraud rates have long forced brands into an impossible trade-off: choose strong protection against fraud (typically bulky, tamper-evident secure packs with their frustrating “Tear Here” tabs) or opt for less-secure packaging that delights recipients, but makes it easier for fraudsters to drain cards of their value, only to be sold to unsuspecting customers. 

Physical evidence of card tampering is often imperceptible to the naked eye, even for retail store cashiers trained to inspect cards for fraud. It’s why recent consumer surveys indicate that about one-third (33%) of U.S. adults have given or received a gift card with no balance, which is a clear sign of tampering or fraud. This figure comes from an AARP research survey showing that gift card fraud is a widespread issue, with scammers recording card numbers and PINs before purchase and draining funds as soon as the card is activated. 

But the tides are finally turning against fraudsters. Digimarc Inc., working with partners in gift card manufacturing, eliminates that compromise entirely. By embedding Digimarc’s advanced, tamper-evident digital identifier directly onto the physical gift card during the standard precision printing process, brands achieve superior card-level security that makes heavy cardboard security sleeves obsolete.

“With Digimarc’s secure gift card solution, brands can confidently move from secure packs (bulky, unattractive cardboard sleeves), to a simple, attractive card-on-carrier spec, and see a significant improvement in card security,” said Tony Rodriguez, chief technology officer at Digimarc. “And because our solution is a digital security layer, we can easily adapt our technology to stay ahead of fraudsters. It’s simply a smarter, more effective, and more environmentally sustainable way to reduce gift card fraud.” 

The result is a gift card that keeps on giving by:

• Providing 3X stronger fraud protection than secure pack that restores consumer confidence.
• Unlocking creative freedom to create beautiful designs and compelling graphics for card carriers—even high risk, high-value cards, including open-loop cards.
• Achieving measurable sustainability gains by vastly reducing the amount of cardstock needed to produce more secure gift cards, which aligns with today’s environmental expectations.

The Hidden Costs of Traditional “Secure” Gift Cards

Gift card fraud continues to erode trust across the industry. In 2024 alone, U.S. consumers lost $212 million to gift card scams, according to FTC data, with losses remaining alarmingly high into 2025. And it’s widely recognized that this figure is not reflective of the real fraud threat, as most consumers don’t bother to report incidents to the FTC. 

For brands, this translates into real business pain: higher customer service demands, increased fraud claims, damaged brand reputation, and lost revenues from repeat purchases. At the same time, retailers are increasingly pushing back on carrying higher value, high-risk branded cards—and for good reason. Fraud results in angry retail customers, demands for refunds, high service and investigation costs, higher transaction fees, and more.

Industry fraud studies suggest that the true cost of any fraudulent transaction can be three to five times the actual financial loss after related costs for customer service, investigations, dispute handling, fraud operations, and customer retention are totaled. Anecdotally, Digimarc had had many conversations with retailers specifically about gift card fraud where they state these costs can be as high as 10X the value of a drained card’s value. This means that for every $100,000 in gift card fraud, the cost to address it can reach $1 million—losses that take a big chunk out of the bottom line for retailers, as well as brands.

Traditional fraud solutions have relied on bulky cardboard carriers, visible tamper-evident features, and complex activation processes. While these provided some deterrence, escalating fraud rates indicate that they are failing to deliver expected security—and they came at a steep cost to both card aesthetics and the environment. Specifically:

• Cashiers dislike the extra time required to tear open packaging to inspect cards.
• Customers feel the disappointment when a beautifully intended gift looks clinical and over-engineered, as well as when its packaging is mangled by manual inspections at checkout.
• And the environmental toll adds up quickly. Heavy cardboard secure packs, plastic films, and excess material contribute to unnecessary waste, higher shipping emissions, and more landfill volume, and all for packaging that serves its purpose only until the moment of purchase.

“Secure pack specs require significantly more cardstock material than card-on-carrier specs to produce,” said Jennifer Suckey, vice president, retail sector at Digimarc. “So, from a sustainability perspective, Digimarc’s technology enables brands to confidently move to a card-on-carrier spec with even better security, which is a real win-win.”

Superior Security Starts at the Card—and Extends to the Activation Layer

The Digimarc secure gift card solution flips the script by moving security where it truly belongs: both the card and the card activation layer:

• Card manufacturers print each gift card with one of Digimarc’s enterprise-grade digital watermarks: a sophisticated, scanner-readable layer that cannot be tampered with or altered without detection.
• Retailers deploy Digimarc’s security update across their existing scanner hardware, enabling scanners to automatically detect tampered, Digimarc-protected cards.
• Cashiers or consumers simply scan the back of cards, as they normally would, at registers or kiosks.
• Compatible scanners running Digimarc’s security update read the watermark and instantly evaluate whether it has been tampered with, indicating a compromised card. If tampering is detected, the card will not activate.  If it is intact, the card is activated and funded immediately, right at the point of sale.

This next-generation digital protection is more robust than traditional security measures because it authenticates the product itself (rather than relying on external packaging that can be bypassed or damaged) and makes the activation layer “intelligent,” so it won’t activate compromised cards. As a result, the fraud chain breaks down.

And it works in real-world contexts. Early results from large customer pilots, including the first with Schnucks Markets, demonstrate zero fraud events on Digimarc-protected cards while maintaining or even improving checkout speed.

For brands, this stronger security foundation delivers peace of mind and measurable ROI through reduced fraud losses, fewer disputes, and higher consumer trust. For retailers, it unburdens their stores from having to deal with frustrated customers, refund costs, and a myriad of other costly impacts. 

Unlocking Beauty and Giftability

Once security no longer dictates bulky packaging, design flourishes. Imagine holiday-themed gift cards with elegant, festive artwork. Wedding cards featuring romantic custom illustrations. Corporate incentive cards that perfectly align with a brand’s premium aesthetic. Birthday cards that look like miniature greeting cards. The attached cardboard becomes part of the emotional experience — something recipients want to keep, photograph, and share rather than discard immediately.

This shift dramatically improves “giftability.” Cards feel more personal and valuable. They stand out on retail shelves and online. Social media moments increase as givers proudly show off thoughtful presentation. Brands benefit from stronger emotional connections, higher perceived value, and better sell-through rates.

The invisible nature of the Digimarc digital identifier, added to cards by expert commercial manufacturers like WestRock, is what makes this possible. Security remains 3X more secure than secure pack, but completely invisible to the eye, freeing every design decision for maximum impact.

Delivering Real Sustainability Progress

Digimarc’s stronger security also frees brands to achieve meaningful environmental gains. By eliminating or dramatically reducing bulky tamper-evident cardboard packs, brands cut material usage significantly. This means fewer trees harvested, less energy consumed in production and shipping, and substantially lower waste at retail and consumer levels.

WestRock brings deep expertise in sustainable printing practices, including responsible sourcing, eco-friendly inks, and optimized production processes. When combined with Digimarc’s digital-first approach, the partnership creates a lighter overall footprint without compromising protection or aesthetics.

This is a winning combination, as consumers increasingly reward brands that demonstrate authentic sustainability. Studies show overwhelming majorities prefer and are more likely to purchase from companies with eco-friendly packaging. By promoting gift cards that are verifiably secure, visually stunning, and measurably greener, brands create powerful storytelling opportunities for CSR reports, marketing campaigns, and consumer communications.

Every card sold becomes a dual narrative: one of celebration for the recipient and one of responsibility toward the planet. That’s the power of gifts that truly keep on giving.

The Benefits of an Ecosystem Approach 

Digimarc is helping brands and retailers win the war against fraud, but it can’t do it alone. It requires an ecosystem approach with retailers, scanner hardware firms, and printers where:

• Brands choose Digimarc-protected gift cards.
• Digimarc delivers the digital identifier that provides superior, tamper-evident security detectable by scanners at the point of sale.
• Printers handle high-volume, precision printing with the Digimarc digital identifier embedded flawlessly into cards during production scale.
• Retailers update their in-store scanners with Digimarc’s security update, in coordination with their hardware providers.
• Brands receive a turnkey solution that requires minimal process changes while delivering outsized benefits across security, design, and sustainability.

This ecosystem approach to gift card security removes legacy barriers that once forced difficult trade-offs. Brands no longer have to choose between security and giftability, or between protection and environmental responsibility.

A New Standard for Gift Card Programs

Forward-thinking brands are already recognizing that the future of gifting demands more than convenience. Recipients want to feel confident that their gift is secure. They want the presentation to reflect thoughtfulness. And increasingly, they want to support companies that demonstrate real progress on sustainability.

The Digimarc and card manufacturer collaboration meets all three needs in a single, digital solution where everyone wins. Why? Because:

• Stronger security builds trust.
• Beautiful designs create delight.
• Reduced material use delivers genuine environmental impact.

Gift cards have always been popular because they offer choice and flexibility. Now, they can also offer confidence, joy, and responsibility. They truly become gifts that keep on giving—to the recipient, to the brand’s reputation, and to the planet.

The Era of Compromising on Gift Cards Is Over 

The future is cards that are 3X more secure, beautiful, and sustainable. Together, Digimarc and forward-looking card manufacturers are defining this new standard for gift card security by eliminating bulky packs, unlocking stunning creative packaging designs, restoring consumer confidence, and delivering real sustainability gains. 

The only question now is, what are brands waiting for? To learn more about Digimarc secure gift cards, visit us online.