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Prezzee Gift Cards, Accepted By Aussie Retailers, Could Be Hit By Scammers

Customers of several leading Australian retailers including The Good Guys, Harvey Norman, JB Hi-Fi, Officeworks, Kmart, Coles and Woolworths, could find their Prezzee e-gift cards compromised by scammers, as they have been overseas.

Prezzee customers buy, send or store digital gift cards for retailers around the world. It has about 1,400 retailers on its platform, ranging from Amazon to Coles in Australia to Fanatics and Sephora in the US.

Recently, the company has been hit by significant fraudulent activity by scammers using stolen credit card details in the US to buy gift cards, reported The Australian.

Prezzee has therefore been forced on the backfoot as it has had to crack down on the scammers leading to a rise in its expenses.

That’s one of the major factors that its current owner, Australian billionaire Shaun Bonett who owns about 85 per cent of Prezzee via his private Precision Group, has attributed to its recent nearly $80 million loss.

The Australian obtained documents that showed Prezzee recorded a statutory $79.2 million net loss for the 18 months to December 31 after a $38.9 million loss in the previous financial year.

“Over the last 18 months, the biggest problem we’ve had in the US has been fraud, where it has been at never before seen highs. We have experienced fraud [on] up to 30 per cent of transactions. In
Australia, it has been in the range of 0.3-0.7 per cent, and the UK is very similar,” said Bonett.

Prezzee chief executive Craig Smith has noted that the company has reportedly significantly bolstered its internal fraud detection team (it had previously been outsourced), as well as expanded on its legal and finance systems and functions.

Revenue at the Sydney-headquartered company reached $160m, its 2023 financial report shows, up from $60m in the 12 months to June 30, 2022.

Prezzee takes a fee from each digital gift card sold, and total card sales were $3.4bn in 2023 after selling $1.1bn in 2022.

Prezzee’s merchant fees expenses rose from $38m in 2022 to $119m for 2023’s 18 months, while IT expenses more than doubled to $3.5m and legal fees increased from $819,000 to $6.4m.

As Prezze wrestles to grow revenue and bolster its defences to protect its customers against scammers, it has already been hit by a string of high-profile departures over the last 18 months including chief executives, its chief financial officer, chief digital officer, chief commercial officer, chief marketing officer, its Australian managing director, and the president of its US operation. The most significant exit though came in May when Claire Morris, the co-founder of Prezzee, resigned from the board.

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