Most merchants are victims of gift card fraud. Most gift card losses (62 percent) are due to dishonest employees; 13 percent to counterfeit cards and 13 percent to stolen cards. Thieves are hitting consumers as well by buying gift cards with stolen credit cards where they can keep buying off of the gift card even if the credit card is reported.
Additionally, gift card thieves and counterfeiters are using the internet to sell gift cards to unsuspecting consumers. Your best bet is to always buy your gift cards directly from the retailer.