As lawmakers and police continue to fight back against organized retail thieves stealing merchandise in stores and warehouses, more criminals have turned to wiping the values off of unopened gift cards sold in stores. The prevalence of gift card fraud has encouraged state lawmakers to consider new legislation that equips prosecutors with more legal room to charge thieves with accessing and using money from stolen gift cards, even before they are activated and have value.
In a typical gift card fraud case, a thief takes the credentials from unactivated gift cards and then puts cards back on the shelves where unsuspecting consumers activate the card, put money into the card and then those funds are stolen. Criminals use special software that alerts them when the card is activated, and then the thief is free to spend the money on the account. One of the major hurdles to prosecution is that unactivated gift cards have no monetary value, making it difficult to charge bad actors who may steal the credentials of 50 or more cards at a time.
So far this year, 22 bills have been introduced across 16 states (AZ, CA, CO, CT, FL, GA, IA, KS, KY, MD, MA, NH, TN, TX, UT and WA) that establish the crime of gift card fraud and provide penalties associated with using stolen money from cards. In 2024, Ohio lawmakers were among the first states to put gift card fraud protection language in statute. Ohio’s bill (OH HB 366), part of a larger organized retail crime (ORC) legislative package, included language classifying a gift card as an "access device" that should be treated similarly to a credit or debit card.
Kansas and Utah could become the first states in the 2025 session to pass legislation mirroring what Ohio’s HB 366. The Kansas Senate unanimously passed a bill (KS SB 84) in February that amends existing language on financial card theft to include gift cards as part of that definition. Likewise, in Utah, the House passed legislation (UT HB 38), adding gift cards to the list of property that can be obtained unlawfully.
Most gift fraud bills introduced this session focus on defining the offense and its criminal classification. For example, Arizona’s proposal (AZ SB 1351) makes acquiring gift card information and obtaining money from the card without the consent of the gift card holder a class 4 felony with a minimum sentence of one year in prison. Meanwhile, Georgia’s legislation (GA HB 447) establishes the crime of gift card fraud and provides punishment levels corresponding to the value stolen.
And finally, several states have included gift card fraud provisions in bills broadly addressing ORC. Lawmakers in Colorado (CO HB 1141), Connecticut (CT SB 1321), Iowa (IA SF 266), Tennessee (TN HB 207 and TN SB 240) and Utah (UT HB 38) included prosecutorial language on gift card fraud as part of comprehensive approaches to fighting ORC.
