Gift Card Fraud: It’s the Thought that Counts

According to an annual survey by the National Retail Federation, gift cards are the most requested gift item for the 9th year in a row. For many, gift cards are an easy solution to an age-old dilemma: What to give the perennially hard-to-shop-for person. Unfortunately, gift cards are vulnerable to fraud in a way that traditional ugly sweaters and unwanted fruitcakes of years past were not, and a zero balance gift card does not make for a very happy holiday.

Common Gift Card Scams and How to Avoid Them

  • Stolen Card NumbersThieves steal stacks of cards from gift card displays, document the card numbers, and return the cards to the store. They then monitor the gift cards on the retailers’ websites waiting for a consumer to activate them. Once a card has been activated, they use the stolen number to make online purchases, draining the balance to zero. By the time the recipient tries to redeem it, the card is empty. You can minimize your exposure to this scam by selecting a gift card from further back on the rack. Thieves, anxious for the compromised cards to be activated, will hang them towards the front. Better, do not select a card from the store racks, but rather pick gift cards that are maintained behind the counter.
  • Packaging & PINs In an effort to make it more difficult to perpetrate the fraud described above, larger manufactures have started including PIN numbers on the cards and developing packaging that limits access to the numbers on the back. Unfortunately, thieves are patient and crafty and will often tamper with packaging in nearly unnoticeable ways. They may thoroughly and meticulously scratch off the PIN covering so that consumers do not realize it was covered to start. Sometimes they even replace it with fake PIN stickers, which can be purchased online and are very realistic. Always make sure to inspect gift cards for evidence of tampering. If a card looks suspicious, do not buy it. Rather, provide it to a cashier to protect others from falling victim to the scam.
  • Checkout Swap Dishonest cashiers perpetrate this scam at the time of activation. The clerk keeps a stash of cards on hand, activates one of those and then hands an empty card back to the unsuspecting consumer. Protect yourself by keeping an eye on the cashier during the activation process, getting the receipt for the activation, and then making sure the number on the receipt matches the number on the card.

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