Bipartisan plan would increase penalties, protect Michigan customers

State Rep. Mike Harris on Tuesday introduced a bipartisan plan to crack down on gift card fraud and protect local businesses and customers.

Harris, a retired police sergeant, said stronger penalties will empower law enforcement to address the growing organized gift card fraud problem. The problem extends beyond simple theft of preactivated gift cards; sophisticated criminal operations copy gift card numbers and PINs from cards that remain in store for sale. After a card is activated for a customer, the criminals then use the card information to purchase goods, which they then sell for a profit or return to the store for a cash refund. Many of these gift card fraud schemes stem from international organizations involved in other serious crimes, such as human trafficking and fentanyl production.

“High-tech criminal organizations are obtaining gift card numbers to steal from Michigan stores and their customers,” said Harris, R-Waterford. “People attempting to pay with a gift card are shocked to learn that the card is out of funds. These victims are longing for the days when the only used gift cards they received were from white elephant Christmas parties. Now Michigan needs to aggressively prosecute and punish gift card fraud. Our bipartisan plan will enhance penalties on gift card fraudsters to protect shoppers’ dollars and keep mom-and-pop stores and big-box retailers in business.”

House Bills 4598 and 4599, introduced by Harris and Rep. Samantha Steckloff, D-Farmington Hills, would add gift card fraud to Michigan’s law against organized retail crime — a felony punishable by up to five years in prison and a $5,000 fine. The change would allow tougher punishment for anyone who, with the intent to defraud, steals a gift card or gift card number, alters or tampers with a gift card, exploits a gift card purchaser, or obtains anything of value with a stolen gift card or card information.

Retail stores are also ramping up security measures to prevent and detect gift card fraud, and customers can protect themselves by checking gift card packaging for any signs of tampering.

HBs 4598 and 4599 were referred to the House Committee on Regulatory Reform.