Texas Senate Committee Advances Gift Card Fraud Bill Enhancing Penalties and Definitions

Texas lawmakers are taking decisive action against the rising tide of gift card fraud, a crime that has increasingly targeted consumers and retailers alike. During the Senate Committee on Criminal Justice meeting on April 1, 2025, legislators discussed Senate Bill 1809, which aims to establish stricter penalties and clearer definitions for fraudulent activities involving gift cards.

Gift card fraud has become a significant issue, with criminals employing various tactics to exploit these popular payment methods. The bill seeks to combat this trend by creating specific offenses and penalties, thereby equipping law enforcement with the necessary tools to prosecute offenders effectively. The proposed legislation addresses the financial losses incurred by consumers and businesses, while also aiming to restore confidence in the use of gift cards as a secure payment option.

The committee adopted a substitute version of the bill, which includes language negotiated with the Financial Crimes Intelligence Center and other stakeholders. Key provisions of the bill broaden the scope of offenses to include tampering with gift card packaging and define terms such as "counterfeit gift card" and "digital imprint." The legislation also introduces a new penalty structure based on the number of items unlawfully possessed, rather than their monetary value. For instance, possessing fewer than five items would result in a state jail felony, while possession of over 50 items could lead to a first-degree felony charge.

John McCord, Executive Director of the Texas Retailers Association, provided testimony highlighting the impact of organized retail crime on the industry. He described how criminal enterprises are evolving, with sophisticated methods to defraud consumers by stealing gift cards and draining their funds after they have been loaded with money. McCord emphasized the need for legislative action to protect both retailers and consumers from these increasingly complex fraud schemes.

As the bill moves forward, it represents a significant step toward safeguarding the integrity of the gift card market in Texas. The committee's actions reflect a commitment to addressing the challenges posed by gift card fraud and ensuring that consumers can use these payment methods with confidence. The next steps will involve further discussions and potential amendments as the bill progresses through the legislative process.