sam_goh

Your post is a little hard to follow since you're a little passionate about this.... but ok here we go.

Cards can be even denomination (as that's normally how any gift card is sold) or odd (e.g. left overvalue having been used at a stay elsewhere). I don't think odd values are definitely fraud.

I also do not think that fraudulent gift cards are being sold directly by Hyatt for "incremental revenue". This makes no sense given that they are replacing any GC that was directly sourced from themselves and licensed resellers and eating the cost.

What Hyatt is not reimbursing, is cards sold by 3rd party vendors, or may have been sold second hand to resellers. Contrary to what you believe, the COGS is not 0 to resellers. They still have to pay their suppliers, e.g. whoever sold them the gift card. And yes, their margins are tight.

Also, while it could be employee fraud, I don't think that's the most likely issue. I can tell you that their numbering system is compromised. It is trivial to buy one working card, and be able to extrapolate 9 other cards with 100% accuracy. If one were really bent on mayhem, you could buy cards from all over, extrapolate the numbers and then quick resell/scam/use. Each card gets you 9 other potential cards.... and you see how this is becoming an exponential problem.

So let's think about things that Hyatt can and cannot do. They are really hemmed in by backwards compatibility.

Replace all cards - nope no can do, millions of cards out in the wild, without ability to trace ownership. Think about all the random cards still out there, who do you even start contacting?

Require pin - another easily defeated mechanism. As Mary noted above, her pin cards were hacked. How? An example would be chip cards today being cloned. Backwards compatibility is easily exploited. When you swipe a chip card, the mag stripe tells the card reader this is a chip card, please insert instead of swipe. Well... a cloned mag stripe can be programmed to say this is not a chip card, and then it allows the mag stripe version of transaction processing. That could be one possible way that pin on the Hyatt GCs are being negated.

Prosecute people who use stolen GCs. I admit when I had $6K of GCs compromised this was my first inclination. But if you think about it further - how many innocent people might get caught up in the wash? There are plenty of FT'ers that have bought GCs because of discounts. Is it their fault that the GCs were stolen? How would you even prove they knew in a court of law? Imagine the PR backlash if Hyatt started demanding payment from clients after the fact?

And lastly - Hyatt GCs can't be easily processed other than at a hotel. Their reservations system isn't possible, nor by other 3rd parties. If you have a rate that is non pre-paid, and can pay at the front desk, you can pay using GCs. Otherwise you're SOL. As a side note, one workaround is to prepay a rate using a credit card, then asking for a refund and paying using a GC at checkout when on property, but that's a lot of hassle.