How to Protect Yourself From Gift Card Fraud
Six in ten consumers have gift cards on their Christmas shopping list, according to a survey of 7,349 consumers for the National Retail Federation trade association, and retailers reckon they’ll sell more than $27 billion worth this holiday season. Unfortunately, gift cards can be a big target for criminal fraud. The FBI estimates that gift card fraud losses are in the low single digits as a percentage of sales, but gift card sales run about $130 billion a year.
Imagine arriving at the checkout line to use a gift card, only to realize the card is empty. It’s the latest way scammers are hitting consumers, and it’s happening frequently. How do these scams work? Well, the criminals take the gift cards and remove the strip, revealing the card numbers and codes. Then, they put a replacement strip over the card, so it doesn’t look like it was tampered with. Once the scammer has that information, they put replacement strips—easily available online—over the codes and exits the store. Later, after you buy one of those cards and load money onto it, the hacker gets an alert that tells them that the funds have been loaded onto the card.
“The crooks can see as soon as someone activates the card, because they’ve automated all this with software that periodically checks the card balance via the internet,” says David Farquhar, a unit chief within the FBI’s Criminal Investigative Division who explained the crime techniques to Consumer Reports last year.
Thankfully gift card issuers are beefing up security with more protective packaging and new back-office technology that flags suspicious activity during purchase and redemption, says the Retail Gift Card Association. But you can also protect yourself by taking these steps:
Consumer Reports says examining a gift card closely before you buy it can save you from a big headache later. If the strip is crooked or has residue from a larger piece of tape, don’t purchase it.
If possible, don’t buy gift cards off the rack; instead purchase the card online or ones that come in secure packaging.
Once you buy a card, make sure to change the pin right away.
If you do choose to purchase a gift card in the store after thoroughly examining the card, be sure to give the gift card receipt to the recipient. If the gift card receipt gets lost and an unscrupulous person locates it, they may return to the store claiming to have lost the gift card and have the one you purchased cancelled so that they may issue the crook a replacement gift card.
Please shop smart and spread the word to friends, family and loved ones to help protect them from gift card fraud before the holidays hit.
Crystal Creek Builders
www.crystalcreekhomes.com
928-445-3200
