You better watch out – gift cards can be a convenient, but fraud-prone, option
The last-minute Christmas gift rush is on, and what were once frowned-upon presents – gift cards – are now acceptable and even coveted.
Many local stores display gift cards from national restaurant, retail and specialty chains. But beware: Some gift cards can carry hefty activation or per-transaction fees, so read the fine print on the card before purchasing.
While there are online options for purchasing gift cards, the National Retail Federation Foundation (NRFF) cautions shoppers to “only buy gift cards from reputable retailers – not online auction sites. Gift cards on online auction sites are more likely to be counterfeit or obtained through fraudulent means.”
The Better Business Bureau says that gift cards are a favorite target for con artists this time of year, and is warning consumers to be on the lookout for sneaky schemes aimed at taking advantage of their popularity.
In one scheme, thieves go into a store, find the gift-card rack and then secretly copy the numbers off the cards, sometimes scratching off the security codes. The thieves then check online or call the 1-800 number to see if someone has bought the cards and activated them. As soon as a card is active, the thieves go on a shopping spree online. By the time you try to use the same card, the money is long gone. So make sure you inspect the card to ensure it hasn’t been tampered with. You can also ask a store clerk for a card that’s been kept behind the counter.
“Consumers need to be on the lookout for gift cards that appear to be ‘open’ or out of their original package, and cards that state an expiration date that is coming up or that has passed,” says Vee Daniel, Upstate BBB president. “Shoppers should also be wary of online auction sites that promise ‘full value guaranteed’ gift cards. It’s sites like these that are prone to selling old, valueless cards that leave the gift giver and receiver distraught.”
The Better Business Bureau receives hundreds of complaints each year for the gift card industry. Complaints commonly allege issues with usability and incorrect charges applied.
Text scams that falsely claim recipients have won a gift card are extremely common during the holidays and expected to surge this season as they did in 2012.
In some cases, consumers are disgruntled when they are given an expired gift card with loaded cash that isn’t usable until the expiration date is corrected. After sending the expired card in for replacement, the consumer is left empty-handed when the card fails to ever return to them.
Here are more tips for purchasers and receivers of gift cards.
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Gift Card Tips from BBB
Know the rules.
Federal rules restrict fees and affect gift card expiration dates. These rules apply to retail gift cards, which can only be redeemed at the retailers and restaurants that sell them; and bank gift cards, which carry the logo of a payment card network like American Express, Visa, or MasterCard and can be used wherever the brand is accepted.
Check it out.
Make sure you are buying from a known and trusted source. Always check out a business at bbb.org. Avoid online auction sites, because the cards sold there may be counterfeit or may have been obtained fraudulently.
Read the fine print before buying.
Is there a fee to buy the card? Are there shipping and handling fees for cards bought by phone or online? Will any fees be deducted from the card after it is purchased?
Inspect the card before buying it.
Verify that no protective stickers have been removed, and that the codes on the back of the card haven’t been scratched off to reveal a PIN. Report any damaged cards to the store selling the cards.
Provide backup.
Give the recipient the original receipt in case the card is later lost or stolen.
Treat the gift card like cash.
For receivers, it’s important to report lost or stolen cards to the issuer immediately. Some issuers will not replace cards that are lost or stolen, while other issuers will, for a fee. Make sure to use gift cards as soon as possible, because it’s not unusual to lose or forget about them.
