Have you ever received a gift card from a relative during Christmas, only to find it empty when you try to use it? If yes, you may have been a victim of a Gift Card Scam.
Gift cards are a convenient option when you cannot figure out what to give a loved one. So you head over to your nearest supermarket, buy a gift card, load it up with money and hand it to your friend, thinking they can buy whatever they like. But, by the time they go to redeem it, the card could be empty.
How is it possible?
Gift card scams are simple. If you picked up a physical card from a supermarket, a scammer could have been there earlier, recording the card number and electronically scanning the pin. Some scammers, scratch the strip over the pin, record the number and then apply a new scratch strip. Next, they keep a track of the card, constantly pinging the server for an update on the card balance. When you open the card and load money to it, they get to know and viola; they spend it faster than you can hand over the card to your loved one.
Despite a big number of scams, Gift cards are a $130 billion worth business.
Some scammers take their scam to the fraud level and it is so easy!
They advertise an electronic product like a TV for about 20% below the market price on craigslist or another online portal. If a 42′ TV is $1400, they would list it for $1100. If a person wants to buy, they take the cash and send you a TV purchased from the card. That way, they get clean money and the fraudulent money spent on the card points at someone else.
So how do you protect yourself from such gift card scams?
- Do not pick up a physical gift card from a high traffic area in a supermarket. Get a card from behind a counter or ask for one from the back room.
- Observe the card for physical tampering like a small dent in the scratch area, a pull away sticker, etc before you buy it.
- Change the PIN on the card right after you buy it. This way even if the scammer has the number and pin, he won’t be able to access it any more. When you hand over the card to whoever you are gifting, give them the new PIN and explained what you have done and the reason. Encourage them to spend that card as soon as possible.
- Do not buy gift cards from online exchange sites, eBay or similar auction sites. It is easy to replace a scratch mark on a gift card with a pre-printed scratch paper available online.
- In case you suspect a fraud, reach out to the card issuers immediately.
By following these simple steps, you can avoid losing your money to scammers and more importantly being embarrassed by handing over empty gift cards to friends and relatives.