Warning About New Gift Card Scams

The Better Business Bureau shares that gift card fraud is up 50% from last year. Here are some ways to protect yourself from the latest in gift card scams!

Gift cards are popular presents:

Gift cards are a convenient gift solution for hard-to-buy-for individuals and for those who prefer to shop for themselves. Rather than giving cash as a present, gift cards are a sensible alternative. However, now people are being warned to protect themselves from rising cases of gift card scams.

Preloaded gift cards:

In lieu of cash, gift card purchasers may opt to buy gift cards. One option is a preloaded card – meaning it comes with a set balance of funds. Preloaded gift cards are widely available in stores nationwide.  But – gift card buyers beware. There’s a new gift card scam that is on the rise across the country.

Here’s what buyers need to know:

The new gift card scam involves preloaded gift cards purchased in the store. Here’s what happens. The store charges you for the gift card but unbeknownst to buyers and sellers, the value has been wiped off the card before it is sold and purchased. Scammers are wiping the value off the gift card before it is even purchased.

How does it work?

One way Scammers are going into stores and cutting off the security codes, allowing them to use the amount of money on the card. However, they leave the other part of the card intact on the shelf. Then, the consumer comes in and buys the remaining part left on the shelf, not realizing that the barcode is missing. When they open the gift card or give it to someone, the card is essentially useless. Way two In a new scam, scammers are now sneakily stealing quantities of gift cards from store shelves, using the balances, reassembling the cards, and returning the drained cards to the shelf. Buyers cannot tell that the card has been tampered with!

What should consumers know?

If you plan to purchase preloaded gift cards off the shelf, consumers are urged to bring the card to the counter and open it to make sure the card barcode is indeed present and that the card is fully intact. However, this is only helpful in cases where the card has been visibly tampered with in the form of cuts, scratches, and scuff marks. Due to the sophistication involved in the new scam, one may be unable to detect that the card was stolen from the store, the information wiped clean, and then the card returned to the store. In some cases, the stolen money gets siphoned to an offshore account. The stolen funds may be difficult if not impossible for consumers to recover. It’s best to avoid buying prepaid gift cards that sit out in stores. Read on to learn more…

What’s a consumer to do?

Gift cards remain a viable gift option, however, consumers must find ways to protect themselves against this new “card draining” scam. Avoid buying preloaded gift cards that sit out on store shelves or those which are accessible to anyone. Rather, shop at stores where gift cards are sold behind the counter or online. Choose non-prepaid gift cards where you tell the clerk what amount to put on the card. Additionally, save your receipt. Never buy any gift cards that look open or damaged. Make sure the card is sealed and that the tape covering the pin is intact. For those opting to buy gift cards online, only use trusted sites and beware of fraudulent websites.

What should I do if I’ve been scammed?

Promptly report it to the gift card company. Ask for a freeze on the card and request a refund. Also contact the Federal Trade Commission (Https://www.ftc.gov) for more information.

Good to know:

The warning about the new gift card scam is not to be taken lightly. Also know that there are other types of gift card scams out there. If someone you don’t know is asking you to buy gift cards and share the numbers or send gift cards to them, it’s a scam. Planning to buy a gift card for a favorite teacher? Need inspiration? Check out our sister article entitled Top teacher gifts.