AS LEGISLATIVE leaders in New Hampshire, we have seen firsthand how the retail industry is facing an escalating crisis: gift card tampering fraud. This form of fraud is not just a nuisance — it is a growing dimension of Organized Retail Crime (ORC) that affects businesses, consumers, and the economy at large. Criminal enterprises have turned gift card tampering into a lucrative racket, exploiting gaps in enforcement and regulation.
New Hampshire, as a sales tax-free state, has become a prime target for fraudsters seeking to maximize the value of stolen or manipulated gift cards. This crime has evolved beyond isolated incidents to become a systematic and organized effort, linked to larger illicit operations, including money laundering, human trafficking, and even fentanyl distribution. It is time we take decisive legislative action to combat this growing threat and protect both retailers and consumers.
Retailers and gift card issuers have invested heavily in fraud prevention, deploying cutting-edge technology and collaborating with law enforcement. However, fraudsters continue to evolve their tactics, exploiting loopholes in current laws and enforcement mechanisms.
To address this, the industry has implemented several key strategies including working closely with federal and state agencies to identify and dismantle criminal networks involved in gift card tampering fraud. Initiatives like Project Red Hook — a collaboration with Homeland Security Investigations — have resulted in more than 150 arrests, demonstrating the value of proactive enforcement. Retailers are deploying new fraud prevention technologies, such as point-of-sale activation protections, encrypted QR codes, dynamic PINs, and real-time fraud monitoring systems. Additionally, retailers are taking proactive steps to train employees on identifying and preventing fraud. Public education campaigns help consumers recognize tampering and encourage them to purchase gift cards only from trusted sources.
While these measures are crucial, they are not enough. The legal framework needs to catch up to the reality of modern gift card fraud.
Current state laws do not adequately address the complexity and scale of gift card tampering fraud. This lack of clarity makes it difficult for law enforcement and prosecutors to effectively combat these crimes. We must enact legislation that establishes clear criminal penalties for gift card tampering and theft, providing law enforcement with the tools they need to disrupt and prosecute fraudulent activity.
I introduced SB 258 to address this growing issue. It would clearly define gift card tampering and unauthorized redemption as criminal offenses. Given the ties between gift card fraud and transnational criminal organizations, penalties should reflect the severity of these crimes. Stronger deterrents will make it harder for criminal enterprises to operate with impunity.
New Hampshire has always prided itself on being a business-friendly state. Protecting retailers and consumers from fraud is not just about security — it is about maintaining trust in our economy. Gift card tampering fraud undermines confidence in retail transactions, affects local businesses, and costs consumers millions of dollars each year. By strengthening our legal response, we can ensure that criminals do not exploit New Hampshire’s tax-free status to fuel their illegal enterprises.
This issue extends beyond retail — it is a public safety concern. The proceeds from gift card tampering fraud often funds more dangerous criminal activities, from drug trafficking to human exploitation. Our response must be swift, coordinated, and comprehensive.
The rise of gift card tampering fraud as a key component of Organized Retail Crime underscores the urgent need for action. By fostering collaboration, leveraging technology, and enacting strong legislation, New Hampshire can set an example for the rest of the nation in combating this growing threat.
As lawmakers, we must stand with businesses, law enforcement, and consumers to ensure the integrity of our financial systems and the security of our communities. I urge my colleagues in the Legislature to support efforts to criminalize gift card tampering, enhance penalties for offenders, and provide law enforcement with the necessary resources to dismantle these criminal operations.