Why Gift Card Fraud Is So Hard to Detect

TEMPO.CO, Jakarta - The manipulation of gift cards-prepaid card vouchers containing balances-is becoming more rampant as the digital payment and e-commerce sectors continue to grow in Indonesia. This fraudulent practice silently erodes the revenues of retailers, banks, and loyalty platforms without being easily detected.

Zentara Technologies, a cybersecurity company based in Jakarta and Singapore, raised this issue at the International Marketing Association (IMA) Europe Conference in Copenhagen. During the forum, Zentara presented various fraudulent schemes that exploit stored-value products in various countries, including Southeast Asia.

Citing a written statement on Wednesday, June 16, Zentara CEO Regal Star said that the most damaging fraud today doesn't always involve hacking into systems. Instead, it disguises itself to appear completely normal.

Regal mentioned that many companies still hope that fraud will be detected and trigger standard security alarms. However, fraud, such as gift card scams, is difficult to detect because these transactions appear to be normal customer activity. He said the system has not been breached. Rather, it is being used against the business itself.

According to Zentara's review, the gift card fraud modus operandi now largely exploits legitimate business processes rather than hacking into systems. Perpetrators exploit various stages in the gift card's lifecycle, from production to activation and redemption.

One discovered modus operandi involves obtaining card details from gift cards displayed on retail shelves. Once the card has been activated by the buyer, the perpetrators can access the funds without arousing suspicion. As a result, the intended gift recipient loses the expected funds, while retailers, banks, and buyers are unaware of any violations. This also creates data anomalies.

Popular Yet Fragile

The gift card industry in Indonesia itself is rapidly growing. Based on the "Indonesia Gift Card Business and Investment Opportunities Databook," the national gift card market was worth US$2.37 billion in 2025 and is projected to grow at a compound annual growth rate (CAGR) of 9.1 percent to reach about US$3.68 billion in 2030.

At the global level, the gift card market is estimated to reach US$1.2 trillion annually. The increasing use of gift cards, digital vouchers, and loyalty programs is driving organizations to enhance the protection of their customers' assets and payment systems.

Zentara noted that most gift card fraud cases go undetected and unreported. This condition makes it difficult to identify revenue losses, especially amid the continuous growth of Southeast Asia's digital economy. The "e-Conomy SEA 2024" report from Google, Temasek, and Bain recorded a digital economy value of US$263 billion in gross merchandise value (GMV) in 2024.

The company's research identified three emerging global fraud methods. The first is card draining, which exploits card information before activation. The second is synthetic identity fraud, which is used to obtain and monetize stored value. The third is AI-based social engineering attacks targeting gift card managers.

Regal continued, instead of solely focusing on technological vulnerabilities, modern fraud increasingly exploits business processes and human behavior.

Hard to Detect with Old Systems

Zentara Technologies' President and Co-Founder, Darian Kuswanto, believes that many organizations still use an outdated approach to measure fraud risk. He said a common misunderstanding is equating security with the absence of violations.

The most significant fraud cases, he explained, often escape conventional alarms by mimicking legitimate customer transactions. Without granular asset monitoring, such as tracking gift cards from initial activation to final redemption, institutions risk bearing substantial yet undetected financial losses.

To minimize risk, Zentara recommends that companies monitor gift card redemption patterns and track how quickly cards are activated and redeemed. He added this includes training employees to recognize AI-based social engineering.

Read: Can Biometric SIM Registration Reduce Cybercrime in Indonesia?

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