The trend: Gift card sales are expected to surge again this holiday season as price-sensitive consumers opt for their reliability. At the same time, new state laws are amping up the pressure on retailers to protect buyers from fraud.

• 67% of holiday shoppers plan to purchase gift cards this year, about even with last year, per CivicScience.
• The National Retail Federation said gift cards will be a top gift item this holiday season, with spending expected to reach $29 billion.
• Gift card provider and distributor Blackhawk Network expects gift cards to represent 39% of holiday budgets, up 12% over last year, based on its survey of more than 2,100 US consumers.

This data shows that gift cards remain a core holiday purchase. US gift card sales are expected to rise to $267 billion by 2028, from $214 billion in 2024, per WalletHub projections based on industry forecasts.

Fraud risks grow with adoption: As gift cards remain a popular and trusted purchase year-round, fraud tied to their use has risen, prompting increased attention from regulators and retailers. The holiday season is a particularly ripe period for gift card fraud, as increased sales and last-minute purchases create more opportunities for potential abuse.

• Gift cards are the most commonly reported payment method used in scams, per Federal Trade Commission data. More than 1 in 4 consumers who reported losing money to fraud said gift cards were involved.
• US consumer losses tied to gift card fraud came to $198.8 million in the first three quarters of 2025, up from $158.4 million in the first three quarters of 2024, per FTC data.

States and retailers are taking action to combat gift card abuses.

• In October, new laws targeting gift card fraud took effect in Maryland and New Jersey, which joined at least 11 other states that have similar legislation on the books. Maryland’s law requires retailers to use tamper-evident packaging that hides activation codes, post warnings about gift card scams, and train workers to detect potential fraud.
• Target has redesigned its physical gift cards to put a blank space on the back where access codes used to be. At checkout, a staffer adds a security access label to the gift card.
• Kroger has added gift card kiosks with locking pegs in some stores to make the products harder to remove and return to racks.

Implications for retailers: Gift cards will continue to be a top choice for consumers, but rising losses tied to fraud are increasing regulatory intervention and calls for stricter safeguards. Even when retailers aren’t at fault in fraud cases, they can experience fallout through consumer complaints, refund requests, and harm to their reputations.

As retailers face greater expectations to manage risks tied to gift cards, investments in security designs, in-store controls, and consumer education are becoming part of the cost of selling these products.