Stop Holiday Fraud – Tips for Owners to Combat Gift Card Theft and Counterfeit Bills

The holidays can be a great time of year for owner-operators with gift card sales and more customers stopping in for a bite while on the road.

The downside? It also can be a prime time for fraud, between increased use of counterfeit money and gift card purchases with stolen credit cards.

We work with hundreds of owner-operators, and have seen some effective efforts to combat fraud. As we get into not only the holiday season but the holiday fraud season, we want to share this advice with more owner-operators so you can hopefully have a truly jolly holiday season.

Tis the Season to Pass Counterfeit Bills

  • Ask your employees to be extra vigilant when it comes to cash transactions and to be more observant of smaller bills $20 and under.
  • Purchase a counterfeit money detector for use at your front counter. The machines can identify and reveal specific security features in each bill and give you a yes or no answer. There are several different options to choose from depending on your needs.
  • Purchase a cost-effective UV counterfeit money light detector to scan and look for special inks and security features woven into US currency that are not visible to the eye.
  • If you use a smart safe, the bill counting mechanism usually has some type of counterfeit detection. Check with your safe provider to see if that option is currently available or if you can upgrade to a bill reader that detects counterfeit bills.

Ho-Ho- Ho Coupon and Promo Code Abuse

  • Coupons and promotions are a big part of the restaurant industry today, but these deals and coupons are often an area of opportunity for employees looking to steal. For example: A customer pays with cash. After the customer leaves  the cashier uses a void or promotion to reduce the amount owed, pocketing the cash difference.
  • Regularly review your coupon, refund and promo reports. Review the list of employees able to authorize a promotion through the POS system. The tip is to look at patterns over time after first creating a baseline – so for example, with a certain coupon or discount promotion, is there one employee who redeems that coupon or promo more often than their co-workers?

Deck the Halls with Gift Card Fraud

  • Only keep a limited number of gift cards on display at the front counter. Keep the rest in secure locations behind the counter or in the safe to deter the theft of blank cards. Hold employees accountable for gift card safety and inventory.
  • An employee can easily commit gift card fraud at the register. For example, the cashier receives a gift card as payment from a customer which still has a balance after a purchase. The employee switches the customer’s card with a zero balance card near the register. The customer leaves with a zero balance card, and the employee takes the customer’s card with remaining balance.
  • Multiple purchases of gift cards in short periods of time using the same credit card or purchasing high dollar valued cards with checks or credit cards should be looked at cautiously. Consider creating an approval process or restrictions or limits of dollar amounts on gift card sales to protect against crooks using fraudulent credit cards, stolen checks, or counterfeit money to purchase cards.

Bah Humbug for Non-EMV Compliant Point-of-Sale Terminals

  • After an Oct. 1, 2015, deadline created by major U.S. credit card issuers MasterCard, Visa, Discover and American Express, the liability for card present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction. Any party that hasn’t implemented EMV may be liable for the fraud that results from a magnetic-stripe payment.
  • For example, if fraud occurs when a chip card is inserted into a terminal that hasn’t been upgraded, the merchant is responsible for the fraud. It is important to note that the shift in liability to the merchant only applies to counterfeit fraud tied to EMV chip cards.
  • Merchants with items that are easily resold such as gift card are often victims of fraudsters targeting non-EMV compliant terminals.


Looking for more advice in preventing fraud? Our firm Concannon, Miller & Co. P.C. has helped many companies proactively prevent fraud by completing internal control reviews and making recommendations regarding fraud prevention practices. Read more about that here.