The holiday season may be marked by good cheer and glad tidings but it’s also the season for scams — especially for gift cards.
While online gift cards aren’t such a big target for thieves, cards bought inside stores continue to be vulnerable to scammers. In this article, I’ll share things you can do to you can protect yourself.
Beware These Holiday Gift Card Scams
Money expert Clark Howard says gift card scams are so prevalent that some consumers no longer want them.
Here are some gift card scams that have made the news.
One common scam is peeling back the stickers on a gift card to access the numbers. That’s exactly what happened to a grandmother in Oregon who was duped out of $450.
“What it looks like the scammers have done is they’ve pulled back the decals or stickers over those redemption codes, copied the codes and replaced (the stickers),” Ellen Klem of the Oregon Department of Justice, told the Albany Democrat-Herald newspaper. “Then the scammer inputs the codes into the Visa system and drains the money.”
Bad actors also use skimming devices to record data on the back of the gift cards.
“Thieves have been known to target gift card racks,” says an article in the Weirton Daily Times of West Virginia. “They may use handheld scanners to read and steal the magnetic information off the card, after which they place the card back on the display and wait for it to be activated.” Once it’s activated, the crooks can start spending the money.
Gift Card Hacking
Scammers also have been known to hack into retailers’ websites. Once inside, crooks use computer programs to guess credit card numbers and PINs.
Once they get a match, they swipe the money on the card or sell it on the web.
What makes this scam particularly dangerous is that the crime doesn’t have to be done inside stores. “They can do it right from the comfort of their own cave,” Clark says.
You could also find yourself on the receiving end of a phone call from someone pretending to be from a company or agency, perhaps the IRS. They may tell you that you owe money and that you can pay via gift card.
Whatever the ruse, “they all have in common an urgent need for you to send money right away,” the Federal Trade Commission (FTC) says in a blog post.
And if you’ve ever been a victim of a gift card scam, you know that it can be quite difficult — if not impossible — to get your money back from the retailer, which makes things even worse.
4 Ways to Protect Yourself Against Gift Card Scams
Clark urges extreme caution when buying gift cards for yourself or to give as gifts. Here are four ways to stay safe if you choose to do it:
1. Inspect Your Card Before You Buy
Always inspect your gift card to make sure the package hasn’t been opened, the sticker hasn’t been peeled off or the strip hasn’t been scratched off. Look for any evidence the card has been tampered with.
2. Ask for a Card That’s Not on the Rack
Request a gift card that is secured behind glass or the cashier’s station. These are less likely to have been tampered with than those on racks in the store.
3. Never Give or Accept Gift Cards As Payment
Here’s what the FTC says on its website: “Gift cards are for gifts, NOT for payments. Anyone who tells you to pay with a gift card is a scammer.”
Report gift card scams to the FTC at ftc.gov/complaint.
4. Don’t Open Suspicious E-cards
Although they’re less prevalent, online gift card scams do still happen, so don’t open email attachments from senders you don’t know.
The U.S. Department of Homeland Security says this: “Cyber actors may send emails and e-cards containing malicious links or attachments infected with malware.”
Clark says gift cards present both hazard and opportunity, but the key is to do your due diligence.
“The one [gift card opportunity] that may be worth doing is where you get bonus money in return for getting a gift card, but know that the risk has increased and retailers have failed to provide adequate security to protect the purchasers of these cards.”
Do you have some gift cards you haven’t used? Read why Clark says you need to use them fast.