Buying and giving holiday gift cards is so popular and easy, that stores, restaurants, airlines, credit card companies and movie theaters will sell billions of dollars worth this year. They can be purchased just about anywhere, making it the ultimate fast-food of the retail and online shopping world. It sounds so simple. Pick out a gift card, buy it and give it away. Your Christmas shopping is done. Not so quick! Here are some things you might want to consider before buying.
Buyer Beware
Gift card theft, fraud and scams are at an all time high. Thieves and cybercrooks have found a way to drain your card before you or your loved one even gets to use it. They walk into a store where all the cards are left unattended on a display rack or a kiosk. The crooks casually walk up to the display and take a handful of cards. They then go off to a restroom or corner where the numbers are scanned off the back of the cards with a device called a magstripe scanner. Before leaving the store, the cards are placed back on the rack where no one will be the wiser. There has been no shoplifting as far as the store is concerned and the thief can walk right out the front door undetected. In walks the naive customer. Once the card is activated, the thieves can track the numbers and drain your balance instantly or use it for online purchases. The crooks will be checking those numbers every few days and once the card is reloaded, they can drain it again.
Then there are cybercrooks who take those cards and resell them on online auction sites. Scammed again! The Better Business Bureau of Mississippi says, "We urge consumers to be careful when purchasing gift cards during the holiday shopping season.”
Tips to Avoid Scams and Theft:
- Restaurants: Buy gift cards from a reputable source like the restaurant itself.
- Banks: Buy bank cards right from the teller. Get a receipt. Register it.
- Big Box Stores: Buy gift cards from the clerk behind the customer service counter and ask them to check the balance before you buy.
- Airlines: Purchase airline cards directly from the airline website, or call the airline and have it mailed to you.
- Grocery stores, etc: If you must buy gift cards from the rack or the display in the store, make sure the PIN number isn't scratched off the back or been tampered with in any way. When it gets activated by the cashier, have them check your balance before you put your money down.
- Convenience Stores: Even if the cards are behind the counter, you are taking a gamble.
- Don't assume that store employees are above the law. Many a small business has been started on the side in an attempt to make a little extra holiday cash.
- Keep receipts! Practice defensive buying!
- Register your cards ASAP. Most cards can be registered online or by phone and balances checked daily. In some cases, once registered, they can be shut down in the event of theft, loss or fraud by the individual card company.
- For Gift Card tips, advantages and disadvantages see Buying & Giving Holiday Gift Cards
Slow Progress
There is a light at the end of the tunnel. American Express, Discover, MasterCard, Visa and other major card companies are taking steps to stop the thievery by changing the way cash cards are made and redeemed. PIN numbers are now being put on most cash cards. Many retailers are asking to see ID before swiping the card. eBay has put a limit on the dollar amount and number of transactions that can be auctioned. It won't happen overnight. Everyone needs to be on the same page.
Bottom line: Protect yourself, and when in doubt, don't buy.
Sources:
Consumeraffairs.com November 13, 2007
Better Business Bureau, wjtv.com, November 16, 2007
Donna Diegel - Donna Diegel is an experienced baker and published author with more than 25 years of experience in the food industry.
