DALLAS --Now that holiday gift- card givers have handed out billions in plastic presents, the scam artists are as busy as Christmas elves.
Gift-card fraud - be it a simple sleight of hand or elaborate techno thievery - is on the rise, experts say. As the use of gift cards grows, so does their attractiveness to crooks. Consumers bought an estimated $18.5 billion in gift cards this holiday season, up 6.6 percent from 2004.
Retailers and restaurateurs are working with trade groups, processors and law enforcement to spot and stop the latest theft schemes without making the system too burdensome for legitimate consumers.
"Gift-card fraud is a growing concern among retailers nationwide," said Joseph LaRocca, vice president of loss prevention for the National Retail Federation, an industry trade group with headquarters in Washington.
"Gift cards are being used as mainstream currency among retailers, from fast-food restaurants to major department stores," LaRocca said.
In fact, restaurateurs, although later to the gift-card game than their retailing cousins, represent a rapidly growing group of gift-card sellers.
Major retailers continue to dominate, with a 70 percent share of gift cards purchased.
But restaurants accounted for 12 percent of gift cards purchased in 2005, more than double the 5 percent reported two years before, according to First Data Corp., which processes electronic transactions.
Since so many gift cards are given during the holidays, January and February become prime months for gift-card redemption, by consumers and thieves.
Experts describe gift-card fraud as a small part of the overall $31 billion in retail "shrink." The catch-all term includes everything from employee theft to vendor fraud at retail stores, not including restaurants.
"When you look at that number, the gift-card fraud losses that I'm aware of are minuscule," LaRocca said.
He and others said they've not seen solid numbers that can quantify the problem.
"There isn't a lot of good data," said Richard Hollinger, a criminology professor at the University of Florida who produces the annual National Retail Security Survey. "Companies have private data on the extent to which they're having a problem."
But many of those companies, wary of tipping off thieves and scaring off customers, are secretive about their fraud losses and prevention tactics. Several restaurant companies declined to comment for this article because of security concerns.
