A couple of weeks ago I wrote about Jonathan's Starbucks Gift Card. In short, it was a gift card people were sharing; strangers would both add and reduce value in a pay-it-forward social experiment. The experiment brought up several questions, most about human nature; however, for me, it raised the question: are mobile gift card apps safe for consumers?
The Future Of Gift Cards Is Mobile
There is no doubt the future of mobile payments is bright and gift cards will be a big part of the action. The Starbucks Gift Card App has been tremendously successful with consumers and for good reason: they are easy to use, automatically keep the balance and best of all you'll always have the gift card in your pocket. However, the Jonathan's Card Experiment demonstrated one important vulnerability of mobile gift card apps which create bar codes to be scanned at the checkout counter.
Easy To Duplicate, Hard To Identify
The Jonathan's Card experiment worked because people could use an image of the Starbucks Mobile App which included the bar code of the gift card and use it for payment. This image is displayed on the right and if displayed on an iPhone, it looks just like the real application. This makes it difficult for the checkout clerk to determine what they are scanning is a duplicate or the original.
Creating this is image is very easy, just take a screen shot of the iPhone with the original mobile app. It's possible a smart phone could end up in the wrong hands, the card duplicated and the owner might never know.
Less, Not More Risk
It begs the question: if you add your gift card to a mobile app which produces a bar code image of the gift card, are you increasing the risk of losing the value of your gift card to fraudulent use?
In short, the answer is no. After all, a person must still access the application on your mobile phone, take the image and send out the image to others. I don't see this as any more of a possibility than having a wallet lost or stolen. Furthermore, the Starbucks Mobile App has the option of being locked with a password and most smart phones can also be locked with a password. I can't say the same for a wallet.
If you own a gift card and there is a mobile app for it, I think it's a smart decision to use it. Just be sure to dispose of or hold the original plastic gift card in a safe place.
The Mobile Apps Version Of Scratch Off Security
When scoring gift cards, our algorithm likes to see a scratch off security code on the back of plastic gift cards. Its' a great way to prevent fraud. Perhaps a Mobile Gift Card App version of such fraud prevention would be an animated portion where the gift card bar code is displayed on the mobile phone. This would allow the checkout clerk another tool in determining if the bar code being show is authentic.
What do you think? Do you use mobile gift card apps when available? Are they better than keeping it in your wallet?