Inside Schnucks’ Approach to Stopping Gift Card Fraud | Fast Five Shorts

Snook Markets is seeing some absolutely incredible results in preventing gift card fraud.

In a 10 store pilot, according to Chain Storage, the regional grocery chain deployed the new Digimarc Corp. End to end gift card security solution in 10 Snook stores in the St. Louis area for a 10 week period.

With 100% of Digimarc protected gift cards activated successfully and no reported fraud on any cards secured by digimarc.

If the scanner detected any evidence of tampering, the gift card wouldn't activate stock stopping fraud before it reached customers.

Scan cards with untampered watermarks activated instantly.

Specific store level results of the pilot included almost 9 and 10.

87% of cashiers and pilot stores said that cards protected by the Digimarc solution activated as fast or faster than traditional gift cards, resulting in faster checkout.

Cashiers also said they no longer needed to open complex packaging or examine gift cards for fraud, which further streamlined checkout.

No training was needed for customers at self service checkout and there was no impact to any other workflows or processes in stores or the supply chain.

Chris, what do you think of the gift card use case for invisible watermarks?

And I love this use case.

We pride ourselves on this show of scouring the headlines each and every week and pulling out what we think is immediately applicable to everyone.

And this is one of those headlines that meets that grade 100%.

The results you mentioned, I mean they speak for themselves.

Basically zero fraud over 10 weeks.

That's just incredible.

Like that's gobsmacking.

Stop you in your tracks, digest like it's just nuts.

So, and if you want to go down a rabbit hole, listeners look up on YouTube all the links people will go to, to, to, to, to fraud people with gift cards, you know, and like I remember my buddy Dave Stack telling me about like people put these in microwaves to get the little like, you know, things that you scratch off to get them to peel off easily and then they have replacement stickers that they can put on them and, and that's, and then that's essentially what they do.

They get the codes, they put them back on the shelves, then they wait for some unsuspecting dupe to come in, activate the card and then all of a sudden they steal the money.

So that's what's nuts about this.

Digimark's invisible barcode essentially works to prevent all of that type of activity from happening.

It's stellar tech and it's a stellar, stellar use case of invisible watermark technology, in my opinion.

Yeah, I think the Other part too that I'd add.

I agree, Chris.

You know, they're also building on top of an existing technology that Schnooks has already invested in, which I think is a really noteworthy thing to call out here.

They're already using digimark's invisible barcodes for a lot of their bulk items.

And I think for, you know, all of the, the tech companies and tech partners out there listening like this is a great case study in how you continue to develop your existing relationship with your clients.

You listen to what their needs are.

What, what else can digimark do for their Snook client?

And here was a great example.

Where were they seeing fraud?

First it was in bulk items, now gift cards.

And they can attack this problem to the results that you were just talking about.

I mean, it's very impressive.

I think digimarc deserves a lot of kudos here for being, being a true partner with Schnooks to figure out, you know, how do we continue to serve the Schnooks customer and work with the Schnooks team and the amount of fraud.

Chris, did you know, like I was looking at this gift card fraud, almost $200 million just in the first three quarters of 2025 last year.

They don't even have the holiday numbers added into that, which I'm sure is so much more.

But it, this is a huge problem.

25% of fraud complaints taken by the FTC are related to gift card scams.

And they're not getting ma Starbucks or wherever the gift card is for.

They're getting mad at the retailer who's selling them the gift card.

So I think this has just eliminated problems across the board and I think is a really, really great example of technology that's getting in and making some real bottom line changes for retailers in the industry.

Yeah.

And the fact that you could potentially take that down to zero.

Right.

Nuts.

You know, I mean the criminals will figure something out eventually, but in the short term, like if you can get in front of this, you as a retailer can make a pretty significant impact to your bottom line pretty quickly.

So I love this move, it's great.