We haven’t followed the mobile gift card space much, other than to say that having a gift card on your mobile phone makes it much more likely that you will have it when you need it.  But it looks like the technology hasn’t quite been perfected yet and offerings by some popular retailers, Target and Starbucks can still fall prey to the oldest of gift card hacks, copying the card data while it is on the rack, cloning the card, and then when activated by a customer, spending it before they do.  Making gift cards mobile makes it even easier for thieves to perpetrate this scam as they don’t need any fancy card writers.

Perhaps closed-loop retailers that offer gift cards should solve this fraud problem once and for all before dragging it into new offerings like mobile gift cards.