Be careful when
selecting gift cards for your friends and loved ones. Crooks have
learned how to exploit this popular form of gift-giving through
tampering, trickery and outright theft.
Even when the
Holiday season is over, gift card sales are a year round business for
many retailers. Because of this we want to bring gift card scams to your
attention. These scams can drain the value right out of your card
before you get to use it.
"Card Not Present" Scam
The first, and
rarest (although it does occur) of these is called the Card Not Present
or "CNP" scam. Swindlers record the numbers on cards offered for sale,
then periodically check to see if the cards bearing those numbers have
gone "live". By "live" we mean that the cards were sold,
activated and had a monetary value added to them. When they find cards
that have, they use them to make online "card not present" (aka "CNP")
purchases. Using the gift card this way allows the scammer to drain them
of their cash values before their intended recipients can use them.
This doesn't work
on all gift cards, however, just the ones allowing "card not present"
situations such as online transactions. While a scam artist can, in many
cases, easily physically access gift card numbers by prying the card
from its packaging and putting it back once the number is written down,
it's not not easy to hide the fact that the cards' PIN number is now
visible. Once the covering has been scratched away it can't be put back.
Ironically, the packaging itself can conceal that the card has been
tampered with.
If you then
purchased one of these cards, the fact that it had been tampered with
and its PIN number coating removed might go undetected until its
recipient attempts to use it! Many people don't understand the
importance of the PIN number anyway, so a scratched off PIN coating
might not raise any alarm. We suggest that consumers only purchase cards
stored in secure locations that make tampering difficult. We can't let
that piece of advice go without letting you know that store clerks have
also been known to engage in this scam. So purchasing gift cards stored
under lock and key may reduce your chances of being ripped off but it
won't guarantee protection from this scam.
Whether you choose a
gift card from a store display or have a clerk hand it to you, always
take the time to examine both side of the packaging before paying for
it. Better yet, remove the packaging before you leave the store. If you
can see the PIN number or detect signs of tampering, don't pay for the
card or ask for another. Let the store's management know why. If the
card can't be used for online or "card not present" purchases you don't
have to worry as much because the thief would need the card in hand to
use it.
Other ways gift cards have been abused by criminals:
- Employees at stores where gift cards are sold steal them from
their displays, activate them with store scanners, then go on shopping
sprees. Sometimes they use the stolen cards to purchase new cards to
launder their stolen merchandise.
- Thieves pretending to be customers engage in sleight of hand by
swapping blanks (previously stolen) for new cards activated by clerks
during a sale, then change their minds and cancel their purchases. The
clerks are clueless because they think they got the new cards back and
the thief walks out of the store with the new card in their pocket.
- Stolen cards can end up on auction websites where the
unsuspecting bid on them to get a good deal. The National Retail
Federation advises consumers to only buy gift cards online from a
reputable dealer and never through an online auction because what you
bid on may well be a stolen or counterfeit gift card.
- Crooks will carefully slit open bar code-bearing gift card
packaging to remove new, unsold cards and replace them with cards that
have had their funds drained. When these "empty" cards are sold, the
activation of the packaging's bard code loads the real card (in a
thief's possession) with the funds.
How to avoid gift card scams:
- Only purchase gift cards from reputable sources. Better yet, get them directly from the store they're from.
- Don't
assume that if a store has gift cards under lock and key it means they
haven't been tampered with and their numbers accessed. Carefully examine
both sides of the card and look for signs of tampering such as an
exposed PIN. If you find anything questionable, ask for another card and
check it out, too. Repeat as many times as necessary.
- Online
gift card purchases should be made from the website of the retailer they
are intended to be used at. Never buy them on auction sites even if it
looks like a great deal. Remind yourself that these cards may be stolen
or counterfeit.
- Keep your receipt as proof of purchase until the
cards value has been exhausted. If you lose the card you may be able to
show a cashier at the retailer your receipt and have them issue you a
new gift card. Not every retailer will do this but many will. It's worth
asking.
- Have your cashier scan the card at the time of purchase to ensure that gift card you buy is valid and has the correct balance.
Remember that no
reputable business will require you to provide your social security
number, bank account information or date of birth in order to purchase a
gift card. Asking for this kind of personal data is unnecessary and has
nothing to do with purchasing a gift card. You're not applying for
credit.
