Certain forms of gift card fraud are now classified as organized retail crime, a felony in Michigan, after Gov. Gretchen Whitmer signed two bipartisan bills into law Monday, Oct. 5.

House Bills 4598 and 4599 amend the state's Organized Retail Crime Act to cover gift card fraud specifically. The new law carries a maximum penalty of five years in prison, a $5,000 fine and restitution, WILX reported.

State Rep. Mike Harris sponsored HB 4598 and state Rep. Samantha Steckloff sponsored HB 4599.

The scam is simple. Someone takes a gift card off a store shelf, copies or steals the redemption information, then puts the card back. An unsuspecting shopper buys and loads money onto the card. The fraudster drains the balance before the buyer can use it, according to Michigan Public.

Beardslee told Michigan Public that victims sometimes assume they received a defective card and do not report the fraud.

Under the law, it is illegal to knowingly acquire a gift card or its redemption information with intent to defraud, to alter or tamper with a card, or to use stolen card information to obtain money, goods or services. The definition covers both physical and digital cards, whether activated or not.

Before the change, prosecutors relied on other statutes. Earlier in 2026, the Michigan Attorney General's office charged a California man in connection with an alleged large-scale Meijer gift card fraud scheme with one count of conducting a criminal enterprise and two counts of possessing a fraudulent financial transaction device. The criminal enterprise charge carries up to 20 years in prison, while each possession count is a four-year felony. The charges are allegations, and the defendant is presumed innocent unless proven guilty.

Drew Beardslee, vice president of governmental affairs for the Michigan Retailers Association, told Michigan Public the new classification fits the crime better. Beardslee said placing gift card fraud under the organized retail crime umbrella made sense because Michigan already has a dedicated unit in the Attorney General's office for investigating and prosecuting those cases. "We've got a unit that is solely dedicated to investigating and prosecuting organized retail crime, it just made sense to put it all under the same statutory framework," Beardslee said.

Whitmer said in a statement that the bills help protect consumers from fraud and give residents tools to keep their families and communities safe.

The law took effect upon signing.