AINEWS
Valve pulls retail Steam gift cards, citing an unwinnable fight with scammers
The phaseout ends Steam's last direct tie to brick and mortar retail and leaves a real gap for cash paying customers that digital gift cards do not fully fill.
The phaseout ends Steam's last direct tie to brick and mortar retail and leaves a real gap for cash paying customers that digital gift cards do not fully fill.
Valve is ending its retail Steam gift card program, and the reason is brutally simple: scammers won.
For more than two decades, Valve has sold the world on a future where games arrive digitally and retailers become optional. The gift card, a plastic rectangle stamped with a PIN, was a residual concession to a world that still runs on cash, on impulse purchases at checkout counters, on gifts handed across dinner tables. That concession is now gone. Ars Technica reported on Thursday that Valve is phasing out production of new retail Steam gift cards, blaming a long-running battle with scammers who turned the cards into a launderable, high-velocity payment rail.
The decision was not announced with a press release. It arrived as a quiet edit to a Steam support page, and was first surfaced by PC Guide before Ars Technica confirmed and contextualized the change. The practical result: existing cards remain redeemable, but Valve expects current retail stock to be gone by the end of 2026. Digital Steam gift cards sold directly by Valve will continue, and certain retail prepaid debit cards with a registered address can still be used to add funds to a Steam wallet.
Retail Steam gift cards launched in 2012, ten years after Steam itself, and were always a hybrid product. They let a customer walk into a store, hand over cash, and walk out with a code redeemable against a digital library. That same cash-to-code handoff is exactly what scammers learned to exploit. The pattern is well documented: a fraudster pressures a victim, often by impersonating a government agency, a utility, or a romantic interest, and walks them through buying Steam cards at a retailer. The victim shares the PIN, usually by phone, email, or social media, and the scammer resells the codes at a discount on gray-market exchanges, where the funds are converted into cryptocurrency or other assets. From the perspective of a money launderer, Steam codes are a useful intermediate: easy to acquire in small amounts, hard to claw back, and widely accepted on resale markets.
Valve had tried to push back within the constraints of a physical product. The company introduced redemption limits, restricted availability in stores, and printed prominent warnings on the cards themselves, including the directive never to share a PIN via email, social media, or phone. None of it moved the needle on the underlying problem, which is that a high-friction plastic card is fundamentally easier to abuse than a logged-in digital purchase, and that the abuse can happen entirely off Valve's servers.
In a 2024 Steam News post, Valve offered a rare look at the scale of physical card redemptions. The company said that the last 11 days of 2023 alone saw roughly $80 million worth of physical gift cards redeemed, a figure Valve described as a "massive benefit to developers" because the cards convert cash-spending customers into wallet-spending customers. That framing belongs to Valve, not to any independent measurement, and the window is narrow enough that it should not be read as annualized revenue. Still, the number hints at the size of the legitimate demand that lived next to the fraud: a real population of cash-paying, gift-giving, occasional-buyer Steam users, including people who do not have credit cards, who do not want a card on file, or who simply like handing a physical object to a child or a friend.
The phaseout does not serve those users well. Digital gift cards still require a payment method, and the prepaid debit workaround, a retail card with a registered address that can be used to add Steam funds, varies by retailer and by region. For households that relied on physical Steam cards the way they once relied on prepaid phone minutes, the gap is real, and Valve is not promising to fill it.
That gap is the part of the story that gets lost if the phaseout is framed as a clean win against fraud. It is not a win. It is a concession, made by a company that built a software empire by declaring physical retail obsolete, to the fact that retail still has a small but stubborn role in the way people pay. Steam launched in 2002 with Gabe Newell positioning it as a way to bypass boxed-copy distribution; the gift card program, begun a decade later, was the smallest possible accommodation to that legacy. Scammers found a way to weaponize the accommodation, and the calculus finally tipped. The plastic is going away, and with it, Valve's last direct link to the brick-and-mortar world it was built to render unnecessary.
For any other platform still running a physical payment rail, the lesson is narrow but sharp. The mitigations that work for digital fraud, rate limits, identity checks, account-level review, do not transfer cleanly to a piece of plastic with a printed PIN. Once that mismatch costs more than the rail earns, the rail gets cut. The customers who depended on it are the ones who absorb the consequence.