Are Gift Cards secure?

It is still Christmas time… I am pretty sure many of you have received Gift Cards on their favorite stores as Christmas presents.
However, how can you know it hasn’t been scammed? On that key period for Gift Cards, I wanted to point out gift cards frauds and how this issue can change with EMV coming in the US. In fact, gift cards today attract a lot of criminals and thieves.
Why so many? Simply because it is a huge business here in the US: a Mercator reports published that US consumers loaded $ 112.3 billion onto gift cards last year.
How to identify scams?
So, what is interesting here, is to give you some tips to identify what kind of tricks do thieves use for gift cards frauds:
– Classic scheme: a thief checks a gift card displayed in a store, writes down identifying information or just lifts it from the card’s magnetic stripe thanks to a scanner. Once the card is activated, the thief spends the card balance online.
– Another traditional scam: the thief applies a bar-code sticker over the genuine bar-code of a gift card in a shop. Then, when this sticker is scanned, it activates a blank card that the crook has stolen instead of the card the consumer is purchasing. –          Popular scheme: The fraud-maker buys gift cards with stolen credit cards. It allows a thief to extract money from the credit card before the cardholder notices his credit card is missing and cancels it. As gift cards are anonymous, it is then impossible to retrace the thief.
– The Switchscam: The thief (who must be a store employee on this one) receives a gift card as payment from a customer. The card after purchase still has a balance. The employee switches the card with a zero balance card lying by the register. The customer leaves with a zero balance card, and the employee takes the customer’s original card with remaining balance.
How to protect yourself
Now that we have identified the main schemes that are used by gift cards thieves, here are some common-sense steps and tips to help you prevent:
– Stay away from gift cards if the packaging appears damaged (even a little), and always examine it carefully.
– Never give out confidential information (Social Security Number, bank account number, etc.), as for your credit card or bank account.
– Investigate online sellers (e.g. on eBay) and buy gift cards only from those with positive reviews.
– Don’t buy gift cards from online auction sites, as it is a large source of gift cards fraud (many of them are stolen, counterfeit or already used).
– Ask the store cashier to scan the gift card in front of you. It will protect you from thieves exchanging worthless cards for yours, and it will guarantee the validity of your gift card as well as the balance you charged it with.
– Keep your receipt as a proof of purchase, as long as there is money stored on the gift card. As you can see, preventing from gift cards fraud is mainly a matter of careful consideration and double-checking before and after buying a gift card. Moreover, retailers and gift cards providers are working on improving security for consumers’ safety.

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