As one of the easiest universal gifts, gift cards are always a popular choice for gift givers during the holiday season. While a gift card allows the freedom to let the recipient choose what they want, it also creates a bigger opportunity for fraudsters to take advantage of unsuspecting consumers.
Although often overlooked, gift card fraud can happen either when a gift card is purchased or redeemed. Some fraudsters can purchase gift cards with stolen credit card information, or steal the gift card number and PIN, but leave the actual card in the store. From there, thieves can resell these cards or use the funds at the designated store to buy resalable goods. Thieves can also try to return stolen merchandise for store credit which they can later resell.
Here are a few ways to protect yourself (and your gift receiver) from fraud on your gift card:
- Use trusted sources – While you may get a good deal on gift card resale sites, the risk may outweigh the reward. Not all of these sites guarantee the face value of the gift card, as retailers can cancel stolen gift cards or a criminal might resell a gift card they have already used. The best way to combat this is to buy directly from the store you want the gift card from.
- Look for tampering – The safest gift cards to buy are those that are in a thick plastic casing. If the gift card you want to buy is not in this packaging, check the back of the card to make sure the PIN hasn’t been scratched off. Thieves will often enter the store and write down the credit card number and PIN to make purchases online. Another good safe option is to use digital gift cards, as they are resistant to physical tampering.
- Register the card – If the retailer allows you to register the card, do so immediately upon purchasing it. That way, if it is ever lost or stolen, you can protect the balance.
- Be cautious – If you get a gift card, try to spend it as soon as possible. While gift cards rarely have expiration dates, the longer you hold onto your gift card, the better chance that you will forget about it, lose it, or the company may go out of business.
For the full article, check out U.S. News “Money”’s coverage of gift card fraud.