As the United States begins its efforts to reduce credit card fraud by transitioning to EMV, another type of cardthe online gift cardcould see its fraud risk skyrocket.

EMV is set to dramatically reduce card-presentor in-storefraud. In fact, its expected that by October, 70% of U.S. cards will have EMV chips, featuring technology that makes it much harder for fraudsters to swipe data.

Where will the fraudsters go instead? Online. Card-not-present, or CNP, fraud in the United Kingdom rose 79% in the first three years after EMV adoption. And its likely that fraudsters in the United States will follow suit, targeting one of the most popularand most fraud-proneproducts available: the online gift card.

Fraudsters typically look for products and services that allow them to monetize stolen card data quickly. That makes digital gift cards a prime target: theyre essentially a form of cash, so they can either be spent immediately or easily re-sold on both legitimate gift card swap websites and the black market.

Existing fraud detection systems arent sufficient to deal with the problem. Many programs require time and a physical shipping address to detect fraudulent transactions. Neither of those factors is present when selling an online gift card, which is delivered instantaneously and electronically.

This creates huge opportunities for whats being called fast fraud, which occurs when perpetrators take advantage of weaknesses in online and mobile commerce security to steal digital goods. Additionally, most systems dont track the lifecycle of a gift cardwhen and where it was purchased, how it was used, who used itwhich is valuable information when it comes to spotting and stopping repeated fraud.

As online gift card sales rise, so too will related fraud. In 2014, consumers spent $5 billion on digital gift cards. Online gift card sales are growing by 29% a year, and 97% of the nations top retailers and restaurants sell their gift card online.

The trend will likely prove more costly for retailers than other forms of fraud. For example, for every dollar lost to fraud in 2014, it cost merchants $2.79, according to a study from Lexis Nexus and Javelin. However, for online merchants, every dollar lost to fraud cost $3.10.

Whats more, digital gift card fraud can place retailers in difficult situations with their customers. Fraudsters often unload stolen digital goods through legitimate websites that allow consumers to exchange unwanted gift cards. If retailers are able to determine that a card is stolen, they must decide whether to honor a fraudulent gift card thats been sold to a well-meaning customer.

What can retailers do? A reliable fraud prevention system is key. The following tips can help retailers find the right payments solution for them:

Seek help. Whether youre developing an in-house solution or looking for a full-service provider, find experts who understand CNP transactions and the digital payments ecosystem. Available solutions range from software featuring do-it-yourself fraud platforms to complete service providers that guarantee fraud protection and chargeback rates.

Stay skeptical. As in any industry, vendors often overpromise their capabilities. Keep an eye out for red flags or statements that sound too good to be true. Ask to see the vendors current list of clients to make sure the company has experience working in your industry and understands its unique needs and fraud profile. When possible, ask for referrals and interview some of the vendors past and present clients.

Dont forget the customer.Some solutions prevent fraud simply by making the checkout process harder for customers. They slow down the transaction process or require additional information during check out. In todays on-demand environment, these systems often result in dissatisfied customers and abandoned purchases. When choosing a provider, retailers should ask questions about how the solution will impact the customer. The best solution will offer the highest conversion rate for approved sales and the lowest friction checkout process possible.

Thanks to the EMV transition, online gift card fraud is poised for a dramatic rise. With the proper payments solution in place, though, retailers can stop the trendbefore it costs them money as well as customers.

Chris Uriarte is chief payments officer for the Vesta Corporation.