Has the Gift Card You Purchased Already Been Used by Someone Else?

BBB Consumer Alerts
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Finding that perfect gift for Christmas can be stressful, which is why more consumers are purchasing gift cards instead of actual gifts. The National Retail Federation has reported that 56% of consumers will give gift cards this holiday season. Holiday shoppers are expected to purchase an average of four gift cards, with an average of $49 per card, which will leave retailers with more than $29.9 billion in their pockets. However, consumers don’t seem to be the only ones that love gift cards – hackers are swiping money off cards as soon as they’re taken off the rack.

Here’s how the scam works: a hacker takes cards off the rack, writes down the gift cards’ numbers and scratches off the strip on the back to reveal the security code. The hacker then puts a replacement strip back over the security code, puts the card back on the rack and leaves the store. Once the customer buys the card, the scammer uses the number online and wipes the gift card clean before the customer even has a chance to use it.

Although gift card issuers are increasing their security that flags suspicious activity during purchase and redemption, consumers can still take additional steps to protect themselves. Better Business Bureau offers up the following tips when purchasing a gift card this season.

Examine the Gift Card

Before purchasing a gift card, be sure to give it a thorough look to make sure the PIN number isn’t exposed, or the packaging hasn’t been tampered with. If anything looks suspicious it’s best to grab a new one.

Scammers are impatient and will usually put the gift card toward the front of the rack, so it’s best to grab a card from the back.

Do Your Research

It’s best to double check the terms and conditions, the expiration date or any fees tied to the gift card before you decide to purchase one.  Some stores charge service or setup fees, or limit the gift card to in store only, meaning you can’t use it online. Some states have laws relevant to gift cards; you can check with the office of the Attorney General in your state for more information.

Register Your Gift Card

If the retailer allows the option to register your gift card, take full advantage. Registering your gift card makes it easier to keep track of any misuse occurring, that way you can report it sooner and potentially end up saving the money that is stored.

Treat it Like Cash

If you lose your gift card or someone steals it, it’s best to report it to the issuer immediately. Some issuers may not allow you to recover any of the funds, and some will, but for a fee.

You may need to show proof of purchase and the ID number on the card.

Be Cautious When Checking Balances

BBB has received a report on BBB Scam Tracker about a site that claims to help you check the balance on your gift card, however the site steals your balance. If you need to check a gift card balance, go to the site listed on the back of the card itself or, if there is none, go to the website of the company and look for a link to the gift card page.

Use Caution When Buying from a Third Party

If you purchase a gift card at an auction or on a third-party website you may end up with a gift card that has no value, is expired, or was fraudulently obtained.

The seller could sell you a gift card that does indeed have the actual balance on it, but steal the numbers and start wiping the gift card clean after you receive it.

Don’t Pay Using a Gift Card

No reputable company would ask for payment via a gift card. If you receive a call demanding you must pay using a gift card, just hang up. Scammers use scare tactics by threatening you with jail time unless you pay them immediately with a gift card. These scare tactics are nothing but just a tactic to get your hard-earned money.

Consider the Financial Condition of the Retailer

If you purchase a gift card from a company that files for bankruptcy or goes out of business, the card may be worth less than you had anticipated.

If you feel like the company is on shaky ground, it may be best to purchase a gift card from another retailer instead.

Keep Your Information Private

No reputable business would ever ask you for personal information when purchasing a gift card. If they do, take that as a big red flag and purchase one elsewhere.

Use Caution When Selling Online

If you decide to place your gift card online, use caution. Usually the buyer will ask to do a three-way call with the merchant to verify the card is active and has a remaining balance. While listening, the buyer records the touch tone numbers entered to intercept the gift card number, and then they use the gift card without even paying for it.

If someone asks to listen to your balance inquiry or wants to look over your shoulder while you enter the numbers, it is most likely a scam.

Source: BBB.org and National Retail Federation

To report a scam, call your BBB at 256-533-1640 or go to the BBB Scam Tracker. To find trustworthy businesses, visit bbb.org.

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