Protect your gift cards from fraud with these safeguards

Gift cards make gift-giving easier for consumers and provide a valuable revenue stream for restaurants. Unfortunately, gift card fraud is a common and pervasive problem for merchants. According to a recent report by Mercator Advisory Group, fraud affecting digital gift cards alone represents a $950 million annual loss to the gift card industry – and that doesn’t account for physical card fraud.

A common form of fraud that targets the merchant involves criminals’ use of technology to “guess” the gift account numbers at lightning speed, enabling them to test many randomly generated numbers until they hit a valid card. When successful, this approach, called a “brute force attack,” is the first step in enabling criminals to access the value on compromised cards.  

Any form of stored value is susceptible to fraud, including comp cards and stored value linked to a loyalty program. 

There are some steps merchants can take to reduce fraud exposure, typically provided by the gift card provider. When choosing a provider, ensure the following safeguards are in place:

Avoidance of sequential numbers. While using sequential numbers when issuing gift cards seems like a logical thing to do, it vastly increases the potential for fraud. Sequential numbers allow criminals to make educated guesses about subsequent card numbers in a series. You’ll want a provider that randomizes the number sequence on the gift cards it issues in order to prevent criminals from deducing entire card numbers. […]

Checkers & Rally’s sees growth ahead with new loyalty program and mobile app

One of the great things about being in this industry is helping iconic brands grow and adjust to the market. Checkers & Rally’s offers our latest opportunity to be part of such a change. The brand has always been known for its great burgers and its drive-thru locations, but just this week announced that it closed $20 million in funding to fuel new growth. Now its new Paytronix-driven loyalty program and mobile app will be a key part of that strategy, as the company predicts the rewards program and app will help increase guest visits by as much as 20% and increase guest spend by as much as 15%.

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Advance orders are the new reservations on NYE in 2020

In a typical year, most full-service restaurants would find themselves completely booked up with New Year’s Eve reservations by Dec. 29. Today, most are facing capacity limits or full bans on on-premise dining as we head into one of the busiest nights of the year for the industry.

Fortunately, there is a bright spot. In lieu of reservations, guests are placing takeout orders – and further in advance than years’ past.

Leading up to the Christmas holiday, Paytronix data showed advance orders for New Year’s Eve had tripled over the same period in 2019. While it’s unlikely that overall takeout orders on Dec. 31 will triple, the data does indicate that guests were placing their orders much earlier than usual. This may be indicative of the shift from reservations to online orders.

This year’s advance orders, while more plentiful, are generally smaller in size than in years past, most likely due to fewer catering orders for large, private parties.

In 2019, relatively few orders were placed before Dec. 25, but those that were averaged high check totals. Orders placed more than 8 days in advance last year had check sizes between $500 and $3,000, while 2020 has seen smaller checks – from $40 to $400 – placed anywhere from two to eight days in advance.

This likely means that while there are few parties planned to ring in 2021, many guests still plan to keep up tradition and celebrate with a nice meal in small groups at home.

The 2021 restaurant and c-stores landscape… and the big party in our future

Like most of America, the restaurant and c-store industries will be happy to bid 2020 goodbye and hope for a fresh start in 2021. As we at Paytronix look toward the future, we see a brightening on the horizon, one that may even end in a large party.

But getting there is going to mean change, not only in how the industry thinks about guest engagement, but also in how restaurants themselves are constructed. We predict that as restaurant and c-store brands move beyond the pandemic, they will need to make significant investments in the technology infrastructure that enables them to focus on truly owning the guest. […]