Beware of This Gift Card Scam

This holiday season, stores expect to earn a record $24-billion from selling gift cards. Before you buy any of these cards, there’s a new gift card scam we want you to know about. According to the website ScamBusters.org, a growing number of people are finding the balance on their gift card has been drained – long before they ever got a chance to shop! How?

First, crooks are going into stores where gift cards are sold on a display rack. Then they’re writing down the unique numbers on the front of those cards or they’re running cards through an electronic scanner – which can read information stored on a card’s magnetic strip. Next, crooks put the cards back on the rack for a real customer to buy. Then they’ll wait a week or so before calling the toll free number on the back, to see if the card’s been activated. If they find out the card has a balance, they’ll know it’s been activated by a real customer. Since the crook already has the account number, they have all the information they need to go on a shopping spree.

So far, this new scam has only shown up at a few North American stores, but experts say it’s a relatively easy scam to pull off. Since most people won’t use their gift cards until after the holidays, you may not realize you’ve been scammed until several weeks or months from now! So, how can you protect yourself?

• NEVER buy gift cards from a display rack. Experts say you’re less likely to be scammed if you buy cards directly from a cashier, or from a booth that’s inaccessible to the public.
• NEVER buy gift cards from online auction sites, like eBay. Authorities say the Internet is the #1 source of gift card fraud, because many of the cards sold are stolen, counterfeit, or used.
• ALWAYS examine gift cards before you buy them. If you can read the PIN number on the back, or if the packaging looks like it’s been tampered with, don’t buy the card.
• Keep your receipt. Most retailers can track where gift cards were purchased, activated and used. So, it’ll be easy for them to trace fraudulent charges. However, they won’t replace your counterfeit card with a new one unless you can show a sales receipt.