Gift Card Scam Appears
to be Real
You may have received one or more gift cards
this holiday season. Nationally, more than $24 billion in gift
cards are expected to have been given during the 2006 holiday
season, compared to an estimated $18.5 billion a year ago.
Gift cards can be convenient in many respects,
but in prior “Consumer Checkpoint” columns I expressed
concerns about them because users are essentially converting cash—which
can be used anywhere at anytime—to a card that may have
many conditions placed on it, including service fees and expiration
dates. In addition to these concerns, now several law enforcement
agencies are warning of a gift card scam. The Jackson County Sheriff’s
Department in Medford, Oregon, warns that thieves are “jotting
down gift card numbers in the store,” then waiting a few
days to call the store to “see how much of a balance they
have on the card. Once the thief finds the card is activated by
a consumer, they then go online and start shopping,” of
course using the balance placed on the card by the consumer.
When I first heard about this scam on CNN, I
wondered if it was true, not having heard about it from Wisconsin
law enforcement or from the state consumer protection agency.
A check with some of the national consumer protection organizations
revealed, despite the media hype, there is some truth to the scam
warning. In addition, a December 4, 2006, National Retail Federation
(NRF) press release indicates that not only is the scam is possible,
but also that retailers are “implementing sophisticated
safeguards to prevent thieves from obtaining, and using, consumers’
gift cards.” Given all of this, I decided to devote this
month’s column to this apparently growing consumer issue.
What should you do to keep your new gift card
as safe as possible? First, ask the store clerk to ensure that
a gift card you buy has been credited with the correct amount
of money you, or the person who gave the card to you, placed on
the card. Second, keep your original receipt from the purchase
of the gift card in the event you have problems. According to
NRF, the retailer can check gift card purchases to verify that
the card was fraudulently used. Hopefully, the store will then
give you a refund. Third, buy gift cards that are kept behind
the counter rather than at the counter to limit the possibility
the gift card was previously available to the thief. Fourth, look
at the back side of the card and only buy gift cards that have
a scratch-off PIN number where, obviously, the PIN hasn’t
been scratched off. Fourth, only buy gift cards from reputable
sources rather than from online auction sites, since the latter
may be really offering a counterfeit gift card.
Here’s hoping you are able to enjoy
your gift card to its full value.