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Fight against gift card scams with these eight tips

With gift card sales are estimates at $24.81 billion this Christmas season (up from $18.48 billion last year). It is not surprising that there are many gift card scams happening. Don’t be a victim of this type of scam.

Common Gift Card Scams

  • Used, counterfeit and fraudulent gift cards are being sold on auction websites.
  • Sellers often overstate the value of real gift cards they are selling on auction websites, so buyers don’t get what they think they are purchasing.
  • Scammers are using stolen credit cards to buy gift cards and then selling these gift cards for cash, either at online auction sites or elsewhere.
  • In other words, auction gift card scams now pose a much bigger threat than gift cards displayed on public racks in stores.
  • Crooks swap blank gift cards that they stole on previous trips to a store for cards activated by clerks when they purchase them. Since the clerks don’t realize that the returned cards are blank rather than the ones just purchased, the scammers are able to steal fully charged cards.
  • Thieves also carefully open the packaging of new gift cards and replace them with used, worthless cards. When the card is sold, the gift card the scammer has in his possession gets activated, rather than the worthless used card that the real buyer has. (This will only work on some types of cards.)

The Latest Gift Card Scam

Gift cards have a unique number in a magnetic strip that is used to track usage and outstanding balances. The scammer (with a small and inexpensive mag-strip scanner) comes into a store that displays gift cards on racks. With the scanner, he can easily read and copy the gift card serial numbers.

Then a customer buys a gift card and adds a balance to it. Since these are usually for Christmas, there might be a few days or a couple of weeks before the card is used. During this time, the scammer calls the gift card’s phone number and enters his copied numbers to find out which cards have a balance. Most gift card systems don’t use passwords. The scammer can then go on a shopping spree and drain the gift card balances. It is very simple and profitable since there is a very small chance at getting caught.

8 Tips for Protecting Yourself

There are plenty of things that you can do to protect yourself from gift card scams. And none of these things will take more than a few minutes.

  1. Don’t buy gift cards from online auction sites. Since this is a large source of gift card fraud, these cheap gift cards may well be worthless to you. Some of these cards are real, but many are stolen, counterfeit, or used. It’s not worth the risk.
  2. Only buy gift cards directly from the store issuing the gift card or from a secure retailer’s website — no matter how much cheaper they may be somewhere else. If you do buy a gift card online, make sure you buy it from the place that you plan to use it.
  3. Don’t buy gift cards off of publicly displayed racks in retail stores. In addition, don’t assume that because gift cards are inaccessible to the public, they are safe. After all, store employees can participate in gift card scams too.
  4. Always carefully examine both the front and back of a gift card before you buy it. If you can see a PIN number, put the card back and get a different one. If a gift card looks like it could have been tampered with, don’t buy that gift card.
  5. Always ask the store cashier to scan the gift card in front of you. This will guarantee that your card is valid when you buy it and that it reflects the balance you just charged it with. This will also protect you from crooks who exchange worthless cards for the cards you think you are buying.
  6. Always keep your receipt as a proof of purchase as long as there is money stored on the gift card. Since many retailers can track where the gift card was purchased, activated and used, if the card is stolen, some retailers will replace the card for you if you have your receipt.
  7. If possible, register your gift card at the store’s website. Although not all stores offer this option, you can uncover any misuse of your gift card sooner and report it more quickly.
  8. Finally, never, ever give your Social Security number, date of birth or any other unneeded private information when you purchase a gift card. No reputable company will ask for this info.

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