Complicated physical, secure gift card packaging meant to thwart fraudsters may slow them down. But it doesn’t stop them, and it can frustrate shoppers and cashiers. By embedding a security feature into gift cards instead of the packaging around them—and using technology at the scanner and server level where cards are activated—retailers and brands can simplify their packaging, delight their customers, and deliver a much more secure gift card that also improves the purchase experience for shoppers and cashiers. As one Schnucks cashier exclaimed, “You mean I won’t need to rip open the packages anymore? That will be a huge time savings!”
To help solve a longstanding problem like gift card fraud, Digimarc first needed to understand it. That meant developing a comprehensive framework for identifying and quantifying the threats facing the gift card industry—one that adapts to an ever-evolving threat landscape. This approach has resulted in the creation of a risk knowledge repository that Digimarc continuously refines by:
Developing internal expertise:
Building on our experience defending the world’s currency, Digimarc investigates existing gift card weaknesses, packaging vulnerabilities, and construction techniques so our team understands the key risks and can develop meaningful mitigations for them.
Partnering with industry leaders:
Digimarc regularly engages with strategic partners in the gift card ecosystem like Blackhawk Networks, InComm, Westrock, CPI, and STL to uncover new threat vectors, validate existing scores, and share insights that move the industry forward.
Improving our technology:
Digimarc continually measures shopper and cashier satisfaction and fraud rate where our gift cards are deployed. We use that data to refine our understanding of the threat landscape and improve the technology behind our solution.
Fraud Risk Score is Digimarc’s internal comparison tool for evaluating the relative risk of different gift card designs and security features across gift card attack scenarios, based on the effort to execute the attack and the likelihood of detection. In internal analyses, Digimarc’s secure gift card technology reduced the Fraud Risk Score relative to traditional physical security layers alone from 72 to 20.
To calculate the Fraud Risk Score for each evaluated scenario, Digimarc assigns an Effort rating reflecting the level of effort to execute the attack, and a Detectability rating reflecting the likelihood the attack is detected, each on a 1 to 10 scale using Digimarc-defined criteria. Digimarc revisits and adjusts these attack scenarios and scores as new data emerges or new gift card security features are deployed. The Fraud Risk Score for a particular gift card design or security feature is the product of the Effort and Detectability ratings, producing an index from 1 (lowest risk) to 100 (highest risk). This index is a Digimarc-developed internal comparison tool intended for comparative evaluation of different security features and security strategies under the evaluated assumptions and is not an industry-standard measure or a guarantee of actual fraud outcomes.
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