Schnucks' Implementation of Digimarc's New Gift Card Security Solution Eliminated Fraud While Accelerating Checkout

Digimarc-protected cards have had zero fraud events, a significant improvement to comparable cards with traditional, packaging-based security.

Digimarc Corporation (NASDAQ:DMRC), a leading provider of digital identity and authentication technologies, announced the results of the first implementation of its new technology-based, end-to-end gift card security solution that is over 3x more secure than "card-only" security features.*

The results, which are based on 10-weeks of data from ten Schnucks Markets stores in the St. Louis area, demonstrated exceptional results:

• There were no reports of fraud on Digimarc-secured cards. This is a significant improvement from the incidents of fraud on other brands' cards using traditional, packaging-based security during this same period and the incidents of fraud on cards from these same brands in a comparable period prior to adoption of the Digimarc solution.
• 100% of Digimarc-protected gift cards were activated successfully.
• 87% of cashiers said cards protected by the Digimarc solution activated as fast or faster than traditional gift cards, resulting in faster checkout.
• Cashiers praised the fact that 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.
• There was no impact to any other workflows or processes in the supply chain or in stores.

Explained Ken Sickles, Digimarc's Chief Product Officer, "We partnered with Schnucks, Blackhawk Network, Westrock, STL Labels, Zebra Technologies, and four major brands to implement our new gift card security solution, which involves replacing gift card activation barcodes with Digimarc's tamper-evident solution. Working with Zebra Technologies, we configured Schnucks' in-store scanners to automatically detect if cards showed any evidence of tampering to the Digimarc on-card watermark activation layer, eliminating the need for cashiers to open and inspect cards."

If the scanner detected any evidence of tampering, the gift card wouldn't activate, stopping fraud before it reached customers. Scanned cards with untampered watermarks activated instantly and flawlessly. The result is greater protection of retailers, brands, and consumers from the financial losses of fraudulent gift cards.

"The success of the Schnucks implementation required unprecedented collaboration across the gift card ecosystem," explained Sickles. "Schnucks was simply amazing to work with at every step, and their understanding of the technology and motivation to solve the problem made them a great partner. But it was also a team effort. Zebra's hardware performed brilliantly. Blackhawk played a key role by helping us engage four top national brands to implement our solution. And STL Labels and Westrock worked with us to bring the Digimarc-secured cards to market. The collaboration allowed us to deliver a solution that worked beautifully for Schnucks, brands, and their customers—so well that it resulted in zero fraud and faster checkout."

"We are confident the watermarked gift cards developed by the Digimarc team will significantly mitigate the persistent gift card fraud prevalent within the retail sector," said Dianna Kaiser, Schnucks Store Auditor and Compliance Officer. "From the initial planning and discovery phases through the completion of the pilot program, the Digimarc team consistently prioritized and addressed our concerns while maintaining a seamless experience for both our customers and our checkers."

Cara Renfroe, Senior Vice President of Global Operations & Transformation at Blackhawk Network, added, "BHN is committed to protecting consumers and ensuring a seamless experience every time they engage with our products. This pilot demonstrates how technology-led collaboration can strengthen gift card security in ways that matter to retailers and shoppers. We appreciate the opportunity to work with Digimarc, Schnucks, and the broader group of partners who helped bring this solution forward."

*https://www.digimarc.com/resources/guides-papers/digimarc-risk-intelligence-gift-cards

About Digimarc

Digimarc (NASDAQ:DMRC) is building the trust layer for the modern world. As AI accelerates how we produce, share, and interact with the world, the risks of fraud, counterfeiting, and misinformation are growing exponentially. Our innovative, highly scalable, and ultra-secure solutions make it possible for consumers, businesses, and intelligent systems to instantly verify what's real, protect what matters, and transact with confidence. Digimarc's solutions for loss prevention, authentication, and digital are built to counter the speed and sophistication of today's AI-enabled threats. Trusted by the world's central banks to deter the counterfeiting of global currency, we exist to protect truth in every interaction, spanning both the physical and digital worlds. Learn more at Digimarc.com.

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Media Contacts:

Wendy Renner

Digimarc Corporation

509-939-1137

[email protected]