Gift Card Scam

Netlore Archive: Email rumor describes a new scam in which crooks copy down the numbers of gift cards sold on store display racks and use them to make purchases online

Description: Email rumor
Circulating since: November 2006
Status: True
Analysis: See below

Email example contributed by Krisztina B., 16 November 2006:

Comments: True. I found confirmation in several different news sources that this form of consumer fraud does exist. It was described in the Wall Street Journal as follows:

In one scam, crooks copy numbers from gift cards hanging on store racks. After the cards are purchased and activated, buyers use them to shop online by entering the card numbers.

So do the thieves. To figure out which cards have been activated, they phone an 800 number to check on balances for card numbers they've copied. When they discover activated cards, they use the card numbers to buy merchandise on a store's Web site, explains Dan Doyle, vice president of loss prevention at Beall's Inc., a Southeastern department-store chain.

Scam is real but rare, says Nat'l Retail Federation

"Instances where consumers lose money from theft of gift card information are extremely rare, but they can happen," confirmed Joseph LaRocca, vice president of loss prevention for the National Retail Federation, in a December 4, 2006 press release. "Most gift cards are outfitted with scratch-off security codes and protective packaging, in addition to a special verification number distinguishing one gift card from another. Also, retailers have created complex back-end systems to prevent criminals from obtaining proprietary gift card information."

Given a selection between prepaid gift cards displayed on an open rack versus ones kept behind a customer service counter, the latter is probably still the safer choice. The National Retail Federation recommends only purchasing gift cards from reputable businesses, not online auction sites or other resellers. Before buying any gift card, be sure to check the protective packaging for tampering.

See the resources below for more consumer tips.

Sources and further reading:

National Retail Federation Addresses New Gift Card Scam
Press release, 4 December 2006

Protect Yourself from Gift Card Scammers
Fox30 News, 29 November 2006

Scam Targets Gift Cards
Medford Mail Tribune, 10 November 2006

Stopping Retail Scammers
WVLT-TV News, 29 October 2006

Shoplifters Taking High-Tech Road
Wall Street Journal, 25 October 2006

Last updated: 12/07/06

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