Tips for avoiding problems with gift cards
December 11, 2015
Gift cards are the most popular and convenient holiday gift, but consumers need to watch out for fake cards and security flaws.
Holiday shoppers spent more than $31billion on gift cards in 2014, making them the number one gift eight years in a row, according to the National Retail Federation.
While gift cards may be popular, the Better Business Bureau receives hundreds of inquiries and complaints each year about fake cards and the fraudulent sites that sell them.
Unlike credit and debit cards, most gift cards don’t require proof of ownership such as photo ID, signature, or pin. Little personal information is required to purchase or use a gift card, making them attractive to scammers who can get them in bulk and resell them online.
The Better Business Bureau serving Alaska, Oregon and Western Washington advises consumers to watch for the following red flags:
- Online auctions. Be careful buying gift cards from online auctions because it’s impossible to tell if the card is legitimate or has a balance. Con artists can easily tamper with the card and then sell it online.
- It’s free. Offers for free gift cards are a way scammers can collect consumers’ personal information to commit fraud.
- It’s the only payment accepted. There’s little difference between buying an item with a gift card and wiring money. Just like cash, once the funds are in the hands of the seller, retrieving them is nearly impossible.
- The silver strip. This strip on the back of the card protects the card’s security code. A scammer can retrieve the gift card number and its security code prior to it being purchased by removing this strip. A monitoring system alerts the scammer when funds are applied, and the card has been activated. The card is now ready for a scammer’s personal use.
Before making holiday gift card purchases, the BBB suggests consumers consider these important tips:
- Purchase directly. Protect finances and personal information by purchasing gift cards from the retailer. Discounts are enticing, but nothing is gained when a card is worthless.
- Verify the card. When shopping in person, have an employee verify the card balance before leaving the store. Don’t use a gift card that has been tampered with. Check that numbers and security strips are intact.
- Save the receipt. When buying a gift card, keep the receipt for proof of purchase.
Visit bbb.org for information on businesses and go to Scam Tracker to learn about scams in your area or provide information about a scam.
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