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Gift Card Risks and Rewards

It’s no surprise that gift cards have become the gift purchase of choice for the holidays. There is nothing to wrap, the size and color are always right and the convenience is unbeatable. The convenience, however, is being undermined by the latest scam to impact consumers. How are today’s thieves using your gift cards while they are still in your possession?

The scam is really quite simple. The thieves steal the cards’ identification numbers and use the numbers to shop online or reprogram a different card to shop in the store once you’ve activated the card. Each gift card has a unique serial number embedded in the magnetic strip, which taps into a centralized computer that tracks outstanding balances and usage. Thieves can easily acquire small, hand-held magnetic strip scanners, slip one of these devices into their pocket and walk into a store that offers these plastic gift cards. The gift card predator can take a handful of cards into the dressing room and scan each card to record their unique ID numbers. When they’re done with the cards, they put them back on the display.

A holiday headache

Consumers who buy a corrupted card are headed toward an unforeseen holiday headache. The criminal can reprogram a used card’s magnetic strip to match the ID number they previously scanned and merrily shop until your balance goes to zero. In a less high-tech version of this scam, the thieves write down the numbers and then use them to make online purchases.

How does this thieving gremlin know when your card is activated and what the value is? Stores that offer plastic gift cards also allow customers to check their card balance via telephone with the ID number. Every few days, the criminal checks the balance on their stack of card IDs, and when one gets fueled with cash by an unsuspecting consumer, they either start shopping or offer it for sale online.

While you may not be willing to substitute cash or a traditional gift for a gift card, try the tips in our sidebar for a safer shopping experience. Maintain vigilance, common sense and caution to keep the holiday and everyday gremlins at bay.