ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

Walmart Introduces Defensive Tactics Amid Growing Threat of Gift Card Scams

Walmart's proprietary technology, Redemption, is transforming the fight against rising gift card scams.
PUBLISHED FEB 5, 2024
Cover Image Source: Exterior view of a Walmart store | Getty Images | Photo by Kena Betancur
Cover Image Source: Exterior view of a Walmart store | Getty Images | Photo by Kena Betancur

In an age where gift card scams are escalating, Walmart has taken a significant step forward by introducing "Redemption," a proprietary technology. This innovative system is Walmart's answer to the increasing number of victim-assisted gift card fraud incidents. With scams involving gift cards rising by 50% in 2023 compared to the previous year, Walmart's proactive approach marks a critical development in fraud prevention.

Wal-Mart Prepares For
Image Source: Walmart Prepares For "Black Friday" Shopping Mania | Getty Images | Photo by Jeff Zelevansky

The process of victim-assisted gift card fraud typically involves unsuspecting victims being coaxed into purchasing Walmart gift cards and sharing the details with scammers. These criminals often impersonate government agencies or businesses, creating a false sense of urgency to extract immediate payment via these cards. The lack of security associated with gift cards, compared to credit or debit cards, makes it nearly impossible to recover the stolen funds once they are transferred to foreign bank accounts.

Developed in 2018, Redemption aims to identify potential fraud activities during the transaction phase, allowing Walmart to freeze the funds and prevent the completion of such illicit activities. Larry Lundeen, Walmart's Chief Security Officer, emphasized that the technology is designed to spot risks immediately, effectively stopping the scammers from accessing the money.

Amazon gift card in a blue box | Getty Images | Photo by Smith Collection
Image Source: Amazon gift card in a blue box | Getty Images | Photo by Smith Collection

An important part of Walmart's strategy is not just to stop the scam but to ensure that the funds are returned to the victims. Once fraud is detected and intercepted, the funds are transferred to an escrow account. The U.S. Secret Service, in collaboration with the Department of Justice, then steps in to facilitate the reimbursement of victims through its Victim Witness Program. This initiative has been remarkably successful, with the government having returned $4 million to consumers already.

Image Source: GettyImages/Jessica McGowan
Image Source: Getty Images | Photo by Jessica McGowan

Walmart's efforts to fight gift card scams extend beyond the Redemption technology. The retail giant has been educating consumers about such fraud, placing informational signage in stores and online, and warning customers about the risks associated with these scams. Recognizing the importance of frontline defense, Walmart has ramped up training for its employees. The training helps staff members identify and respond to situations where a customer might be purchasing a gift card under fraudulent circumstances. Furthermore, the company plays an active role in the Elder Gift Card Fraud Task Force, led by the National Cyber Forensic Training Alliance. This initiative is dedicated to tackling victim-assisted gift card fraud.

"Walmart is not the victim in this, and we're not losing money, but… we wanted to do everything we could to protect our consumers and our customers," Lundeen said. The company's multifaceted approach, anchored by its groundbreaking Redemption technology, marks a significant advancement in the fight against the burgeoning issue of gift card scams. Through technological innovation and collaborative efforts, the company is setting a precedent in safeguarding its customers from the perils of modern-day fraud.

RELATED TOPICS WALMART
MORE ON MARKET REALIST
Harrison knew it was too good of a collection to let go, and he decided to raise the stakes.
8 hours ago
The guest who had little no idea about his family heirloom was shocked to know its significance.
9 hours ago
Despite making a higher than usual offer, Harrison failed to close the deal.
12 hours ago
The guest regretted that she wouldn't be able to keep the highly valued item in her home anymore.
13 hours ago
They also triggered a showdown between Mark Cuban and Daniel Lubetsky before closing the deal.
1 day ago
As Heather took a second to solve the final puzzle, Seacrest admitted she made it look easy.
1 day ago
Carey suffered a similar snafu a few months ago while playing the same game of 'Bullseye'.
2 days ago
Fans also share some tips that could've helped Bain win the bonus round but it was too late.
2 days ago
Emily Croke coincidentally got the question related to her great-great aunt, Emily Folger.
2 days ago
Luckily for the veteran host, no one in the studio caught the mistake on time.
2 days ago
The executive producer of the show, Michael Davies later apologized for the spoiled show.
2 days ago
Even the seasoned expert was stumped by the unusual subject of the painting.
2 days ago
In the end, Mr Wonderful cut off Greiner with a deal that the founder of Wad Free couldn't refuse.
3 days ago
Seacrest got geniunely spooked as he couldn't figure out who played a prank on him.
3 days ago
The seller brought some "Secret Service" memorabilia of former Attorney General J. Howard McGrath.
3 days ago
The guest was already emotional because of the backstory involving native Alaskans.
4 days ago
The player once again fumbled a puzzle despite moving forward in the game.
4 days ago
The host didn't want to get more of the weird answers on the show anymore.
4 days ago
The founder of Beyond Sushi impressed the Sharks with 100% plant based flavors.
4 days ago
The Shark jumped back in to the deal as he thought his wife would love the product.
5 days ago