Gift cards seem like the all-purpose present. Choose your amount. They’re small and easy to mail. An endless variety of retailers have them. Most everyone likes to get them. They have become so popular that the National Retail Federation says over half of Americans will purchase gift cards this holiday season. The popularity of digital gift cards is increasing as well, and nearly 9 in 10 holiday shoppers (89%) said they believe they’re a safe gifting option amid the COVID-19 crisis. The average buyer plans to get three or four, putting an average of $47 on each. The result will be $27.5 billion in gift card sales.
The Better Business Bureau warns, crooks love them too and have several ways of using them for theft. As the days dwindle towards Christmas, here is BBB’s advice for the many consumers reaching for an easy gift card method of completing their shopping list.
Common gift card scams
One of the most common ways crooks scam gift cards is by using a hand-held magnetic strip reader inside a store to record card numbers from rack displays. They scratch-off the strip that hides the PIN number. It can simply be replaced. (Rolls of scratch-off tape are easily purchased online.) Once you purchase the card and the seller loads money onto it, the thief immediately gets an alert that funds have been loaded and then quickly has a shopping spree. Result: The person you are “gifting” with the card discovers there is no value to it anymore. Your present becomes nothing more than a small rectangle of plastic, only useful for scraping ice off a windshield.
Another method of gift card tampering involves a crook purchasing a card and making a duplicate of its bar code. The copied bar code goes onto a sticker and the sticker is placed over other gift card bar codes on a store’s rack. Every time one of the cards is purchased and loaded with money, that amount instead is added to the thief’s original card rather than the one you are buying. Result: another plastic ice scraper.
Some thieves leave the PIN intact and just use online bots or other software to guess what the PIN number is. Since those numbers are only four digits, it is an easy hack.
Tips to keep your gift card from becoming an expensive ice scraper
When purchasing gift cards, try to remember these tips:
• If you still have time before Christmas, buy gift cards online from the retailers themselves. Crooks can’t get at them for tampering. When buying cards with a high value this is especially important.
• Too late? Have to buy the card off a rack in a store? Do this: Look for cards in well-sealed packaging or kept behind the counter. If they are on an open rack, carefully inspect the bar-code numbers and the scratch-off strip hiding the PIN. Look to see if they have been kept within view of security cameras.
• Save receipts from the card’s purchase.
• If you receive a gift card, change the security code right away.
• Spend the card as soon as possible. Instruct anyone you are giving a card to, to do the same.
• If your card has been used up by a thief, call the issuer and try to get your money back. They may be able to detect that a crook drained the card.
• Be extra careful when buying a card from a secondary seller. In fact, it is best to simply avoid buying from online auction sites or other online secondary markets. Cards could be stolen, counterfeited or simply used up. Don’t be tempted by big discounts on the card’s price.
• Don’t put the card away and forget to use it. A billion dollars’ worth of gift cards go unused every year. (Why do you think retailers love to sell them?)
For questions or concerns about giving or receiving gift cards, contact BBB by calling the toll-free telephone number 800-856-2417 or visit the website bbb.org.