Apparently open-loop (Visa) type gift cards are a favorite of thieves that work with stolen credit card numbers because gift cards when presented at the cash register are generally easier to scan with – they don’t require any ID since they don’t actually have a name on them. So, thieves like to load gift cards with real stolen credit card numbers and use them to buy goods which they can then sell for cash or return for cash. (article)

Undoubtedly, as this gets more popular with thieves, it will make retailers more reluctant to take these gift cards and harder for consumers to redeem them.

In setting up my own business that dealt with gift cards, one of the hardest things was to try to distinguish between gift cards and normal credit/debit cards. After a lot of work, I figured out the fingerprints of a gift card but it wasn’t easy and they aren’t obvious. Perhaps the industry would do well to make gift cards unique in some way so retailers can tell the difference.