The holidays are over, but you may still be figuring out a plan for what to do with your gift cards. If you’ve decided to go shopping rather than exchange, sell, or re-gift, it’s possible you could be in for a nasty surprise. Gift card scams are still popular among thieves looking for a quick buck. Unfortunately, you could try to redeem your gift card only to find there’s no cash left to make a purchase.
“Fraudsters target gift cards because that’s where the money is. The gift card market is a $124 billion per year business. Scammers will copy codes off the back of gift cards, wait for them to be purchased and activated, and then swipe the funds (by shifting them to another card) or use the card to purchase products and sell them on the black market,” Adam Levin, chairman and founder of ID Theft 911 and author of Swiped, told The Cheat Sheet.
Scammers also target gift cards because it’s an easy crime to commit and the chances of being caught are not high. This is why giving or receiving gift cards can be a gamble.
“Depending on the level of security associated with different brands of gift cards, they can convert the card to cash or merchandise with relative ease and little fear of prosecution. The security associated with gift cards is often not as stringent as that associated with credit or debit cards. And, because of the relatively low financial loss associated with any one fake or stolen card, the odds of a criminal investigation and prosecution are quite low,” identity theft and scam specialist Rob Douglas told The Cheat Sheet.
Here’s what you can do if you discover your gift card is a fake.
Contact the issuer
Once you realize you received a fake gift card, act fast. Your first step should be to notify the company that issued the card.
“Immediately notify the company the card is issued on behalf of so that it can freeze any fraudulent transactions and investigate whether it is a case of a single fake card or if there is a larger problem involving a data breach resulting in a significant number of fake cards being on the market,” said Douglas.
Get in touch with the store
After you alert the card issuer, you’ll need to make sure the store where you purchased your card is aware of the theft. This information may help the merchant take measures to improve the store’s security. Your actions may also help protect future customers.
“Notify the store or merchant where your card was originally purchased (many gift cards are sold by grocery stores and merchants other than the brand on the card) so that they too can investigate whether they have other cards that have been compromised. Most important, be prepared to provide a receipt for the card so that you can prove you (or the individual who gave you the card) paid for the card and that you should be reimbursed for any losses,” advised Douglas.
File a formal complaint
Don’t forget to make a formal complaint if you become the victim of a gift card scam. Contact the Internet Crime Complaint Center and make them aware of your experience. Be prepared to share the specific details of how you were scammed.
Reduce your chances of getting scammed
While you can’t prevent someone from scamming you, it is possible to lower your chances. Here are some tips for keeping your cash safe:
1. Consider registering your gift card
If your card’s issuer offers gift card registration, take advantage. You can never be too safe when it comes to cash.
“A number of issuers allow [gift cards] to be registered, and if you receive one, be sure to register it immediately. This could protect you up to the value of the card. Some issuers even allow for a security code. Buy gift cards from legitimate sites and avoid purchasing from third party sellers,” said Levin.
2. Examine and activate your card right away
Douglas advises examining your gift card as soon as you receive it. He also says it’s a good idea to use your gift as soon as possible. Don’t let the card sit in your wallet for a few months:
Examine the card for any signs of alteration. The card may not look correct because of cloning or there may be evidence that the PIN number has been tampered with or replaced. Second, activate the card immediately. Every year, millions of dollars in gift cards go unused for significantly long periods of time. The longer a card remains unused, the longer the value of the card remains at risk to scammers and cybercriminals. If the activation fails or the balance reported following activation doesn’t match the value associated with the card, the card is probably a fake.
In addition, Levin says your best bet is to purchase a gift card that has been placed behind a store counter or kept under lock and key. This added layer of protection could reduce your chances of being ripped off. “Consumers should purchase gift cards that are kept secure behind the store counter or locked in a cabinet,” he said. “Check pre-loaded cards to make sure the amount is correct and don’t use it if the strip has been tampered with.”
3. Save your receipt
Always save your gift card receipt. It’s hard to predict whether you’ll have an issue with your gift card, so it’s best to be prepared with proof of purchase. Douglas said keeping your receipt could help you guard against the risk of sustaining financial loss.