Digimarc and Honeywell Launch Gift Card Fraud Prevention Partnership

The new gift card fraud prevention partnership between Digimarc and Honeywell was announced today as a strategic collaboration designed to strengthen the defenses of retailers against rising gift-card abuse. Under the agreement, Honeywell will integrate Digimarc’s next-generation on-scanner security software into its handheld retail scanners by early 2026, enabling real-time detection of tampered or fraudulent gift cards at the point of sale.

This move aims to make it significantly harder for fraudsters to unscrupulously activate or redeem compromised cards, while offering retailers and consumers enhanced protection and a smoother checkout experience.

Why This Collaboration Matters

Escalating Gift Card Fraud Risks: The global gift card market is expanding rapidly, and with that growth come increased vulnerabilities. Fraudsters target gift cards because of their anonymity and widespread use, often executing tampering, cloning, or fraudulent activation schemes.
Security Built into Checkout Systems: By embedding Digimarc’s security layer directly into Honeywell’s widely used retail scanners, retailers receive pre-emptive fraud defense and tampered cards can be flagged or rejected before activation. This reduces loss for retailers and protects consumers from inadvertently buying empty or compromised cards.
Improved Efficiency & Customer Experience: The integrated solution aims to avoid manual inspection by store personnel, reducing friction at checkout and helping maintain speed of service while enforcing security an important balance in retail environments
Scalable Industry Adoption: As Honeywell rolls out the secure-scanner update globally, the partnership sets a new standard for gift card fraud prevention that other retailers and payment networks may follow, potentially raising the bar across the industry.

What the New Solution Does - Key Capabilities

Tamper-Evidence Detection: The security layer can identify alterations to a physical gift card including tampered packaging or manipulated barcodes/PINs before the card is activated or redeemed.
On-Scanner Validation: Store scanners equipped with Digimarc’s software will automatically check card validity at checkout, minimizing risk of fraudulent activation.
Preventive Defense Rather Than Reactive: Instead of discovering fraud after a card is redeemed or customer complains, this system stops fraudulent cards at the point of sale reducing losses and avoiding customer dissatisfaction.
Compatibility & Ease of Integration: Because Honeywell is a leading provider of retail scanners, many stores can adopt this technology without overhauling their entire POS infrastructure making the upgrade practical and scalable.

Broader Context - Why Gift Card Fraud Prevention Is Critical

Gift card fraud remains a persistent threat in the retail industry. Fraudsters employ a variety of sophisticated tactics including physical tampering, counterfeit cards, phishing scams demanding gift cards as payment, and automated card-number generators targeting e-commerce platforms.

Because gift cards are widely used especially during peak shopping seasons and because funds can be drained or cloned quickly, even small vulnerabilities can lead to large losses for retailers and personal losses for consumers.

Moreover, organizations like the Gift Card Fraud Prevention Alliance (GCFPA) emphasize that successful fraud prevention requires collaboration across retailers, payment networks, technology providers, and law enforcement reinforcing the value of partnerships like Digimarc + Honeywell.

Implications for Retailers, Consumers, and the Industry

For Retailers

Implementing scanners with built-in fraud detection strengthens trust in gift-card programs, which can reduce chargebacks, decrease losses, and protect brand integrity. Stores become better positioned to detect tampering before cards leave the checkout counter minimizing liability and improving compliance.

For Consumers

Buyers gain greater confidence that gift cards purchased in store are genuine, reducing the likelihood of being stuck with empty cards or falling victim to scams involving counterfeit or drained cards.

For the Industry

As more retailers adopt enhanced security, the overall risk and profitability of gift-card fraud may drop, potentially discouraging criminals and limiting widespread fraud rings. The partnership may also set a template for future collaborations between payment-tech providers and hardware vendors.

Challenges and Considerations

Adoption Pace: To be effective broadly, many retailers must upgrade their scanners smaller retailers or legacy stores may face cost or logistical hurdles.
Evolving Fraud Tactics: Fraudsters may shift tactics in response e.g. focusing more on digital gift cards, phishing schemes, or social-engineering scams, requiring continuous innovation.
Consumer Awareness Still Key: Technology alone isn’t enough. Educating consumers about safe gift-card practices remains essential to prevent scams involving gift cards.
Global Standardization: As gift-card systems vary by region and payment network, standard adoption and cooperation across stakeholders will be key to long-term success.

Conclusion

The newly announced partnership between Digimarc and Honeywell marks a significant advancement in the fight against gift card abuse. By embedding advanced fraud detection directly into point-of-sale scanners combining security with convenience this collaboration strengthens protections for retailers and consumers alike. As gift cards continue to grow in popularity, such proactive security measures will likely become a cornerstone of retail fraud prevention strategies worldwide.

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