Credit card fraud with gift cards is now becoming rampant and both the consumers and retailers are victims. If you do watch the news, you surely have heard numerous stories about gift card scams happening all over the country, especially during the holidays.
Hearing about the common gift card scams or the biggest gift card scams during the holidays is not enough, you should know how to protect yourself and avoid being a victim.
Your protection starts with knowing how the different gift card scams work because you can easily recognize when it happens.
Gift cards are the most perfect gift for many people, especially when not specific what to buy a person for special occasion, birthday, anniversaries or the holidays.
Gift cards have become an increasing sales opportunity for most retailers since every gift card purchased will ensure sales when the cardholder will eventually buy products from their store.
With the increase in the demand for gift cards, also raise the opportunity for frauds and scams affecting both retailers and consumers.
How the Credit Card Fraud with Gift Cards Work
There are different types of credit card fraud with gift cards that you must be aware of. One of these is working on the balance of activated gift cards. WalMart, according to some reports has been a victim of this type of scam.
This type of scam can be done either internally or externally. Each gift card has a specific number in a magnetic strip for tracking outstanding balances and usage.
This system works well and provides the benefit of not losing your remaining balance if in case your gift card is lost by simply calling the issuer that the card is lost or stolen.
However, most of these gift cards are displayed on public racks that can easily be taken by any person. Therefore, a scammer posed as customer with a small inexpensive magnetic strip scanner can easily get some gift cards from the rack and scan the number, and then return the gift card as if nothing happened.
Actual customers come and buy these gift cards and charge them with valid money. On the other hand, the fraudsters will simply call the gift card company number and enter the specific number to know which among the cards have been charged and how much are the balances.
Since, most of verification systems do not require passwords and gift cards are given to recipient days after they were purchased, the scammers can very well do their shopping and use up the gift card balances.
Another credit card fraud with gift cards is that scammers can also sell used, fraudulent, and counterfeit gift cards at auction websites or use a stolen credit card to purchase gift cards and then sell the gift cards they bought for cash at online auction websites or other places.
Some online scammers will entice consumers to sign up with their personal and credit card information for a marketing offer such as gift cards to purchase items in their supposedly online stores. Instead of getting gift cards, the victims incur huge charges in their credit cards.
How to Protect Yourself against Credit Card Fraud with Gift Cards
There are numerous ways of protecting yourself from credit card fraud with gift cards. Just follow these simple tips and make your use of gift cards and credit cards safer.
- Don’t be Naive. If an offer for gift cards is doubtful and unbelievable, avoid it and never give out any information, especially about your credit card.
- Purchase gift cards from a secured seller’s website or directly from the shop issuing the gift card. Don’t buy from websites you are not familiar with even if the price is cheaper.
- Avoid buying gift cards from publicly displayed racks. Make sure that the gift card given to you came from a secured location. However, never assume that gift cards inaccessible to the public are always safe. Remember that store employees can be part of a gift card scam syndicate.
- Never buy gift cards from auction websites. Even if it is much cheaper at their online auction sites, don’t buy from them because they are the greatest source of gift card fraud.
It is true that gift cards are the best gifts and are very convenient, but care must be taken in order to protect yourself from any type of credit card fraud with gift cards.