With the holidays in full swing, I wanted to take a few minutes and share with you the ever-growing trend of scams involving gift cards. Why are gift card scams so popular this year? Because the National Retail Federation is estimating that over $24 billion in gift cards will be sold this year. That's a lot of money -- and scammers love getting at your money.
As you hit the stores this season, I want you to be vigilant on these scams, because the crooks that commit them will take advantage of you when it is the busiest and you're focused in a different direction.
Here are the top gift card scams to be watchful of:
You may have noticed over the past few years that, instead of discounted prices, retailers offer a free gift card with purchase. Retailers love this because it brings you back into the store for the redemption of the gift card. However, this transaction is the point of the most common gift card scam right now -- the switch-up. What happens is the cashier rings up the gift card, but gives you a different gift card if you're not paying attention. Maybe it's busy, maybe the cashier is talking to you -- but either way, you're distracted.
This scam is so successful because many consumers don't even realize they were supposed to get a gift card to begin with.
Using Stolen Credit Cards to Buy Gift Cards
This is a tough one to prevent against, because you usually fall victim as the receiver of the gift card. If a person were to use a stolen credit card or debit card (or even another stolen gift card) to buy gift cards, the retailer can (and usually will) shut down the bad gift cards.
The point of this scam is to launder money, and use the new gift cards quickly. In many cases, the bad gift cards end up on online, and the unscrupulous buyer has no recourse once the transaction is complete.
The Empty Gift Card Box
At some stores, usually small box mall shops, they still package pre-loaded gift cards in beautiful gift boxes. However, these boxes are open to tampering.
What typically happens is the crook will use a blade to cut open the edge of the box, take the gift card, and replace the empty box. The person who buys it doesn't even realize it's empty until it's too late.
Want to make a stink about it to the retailer? In many cases it will be tough luck, because the retailer will have no proof of the tampering.
The Old School Gift Card Scam
In some cases, scammers just go old school with pen and paper. In many establishments, you still have to buy a gift card from behind a counter. In this scam, the crook has written down the gift card number before the transaction even takes place. Then, when the card is activated or loaded at the cash register, the crook uses the number they wrote down to empty the card.
Protecting Yourself From Gift Card Scams
It may seem like it's tough to protect yourself from these scams -- but taking a few simple preventative measures can help you from becoming a victim.
First, make sure that the gift card you buy isn't tampered with. Check the seals; look on the back to make sure that nothing is scratched off. Many major retail cards have a scratch-off covering some of the digits to prevent some types of scams.
Second, be aware of your offers. If you're entitled to a gift card for a transaction, make sure that you watch the cashier issue it, and then put it into your wallet immediately. This will prevent the cashier from taking advantage when it's busy.
Finally, don't buy a gift card online from a marketplace where you don't know the seller. If you don't know where the card came from, you open yourself up to being scammed.
While you can't prevent every scam, being vigilant can help you avoid most.