Should You Worry About Gift Card Fraud, Too?
No matter who you ask, you’ll find that gift cards top Christmas wish lists by a large margin in pretty much every age group. In fact, they’re the number one requested gift this year, according to Consumer Reports. But whether you’re the giver or the recipient of said gift cards, you want to ensure that someone isn’t able to come in and steal the balance.
Gift cards seem like a safe choice for holiday presents, especially if the alternative is cash or a paper check. But even with security measures in place to prevent fraud, gift cards are still at-risk.
Luckily, there are a few things you can do to protect yourself against gift card fraud, whether you’re giving them to loved ones or if you’re the recipient. Here are five steps you can take to ensure that the balance doesn’t get swiped.
Buy Directly from the Retailer/Restaurant
We have all seen the gift card racks at certain chain stores, allowing you to buy gift cards from Bath & Body Works, Disney, and Home Depot all at the same time. While this is convenient from a shopping perspective, though, it is also less secure than buying them directly from the store in question.
Gift cards in these one-stop-shop racks don’t tend to turn over quite as quickly as they do in that particular store, as shoppers have many more options to choose from. Not only that, but these gift card “stations” tend to be located in an area that’s removed from the registers. This makes it easier for thieves to steal the card numbers and PINs without store employees seeing.
When at all possible, buy your gift cards the next time you’re in that particular store, rather than buying at a different retailer’s kiosk. You can also buy e-gift cards online, which will further reduce your risk.
Check the Back Before You Buy
How can thieves steal your gift card numbers once the card is in your wallet? Well, they can’t… the trick is, they already have the numbers they need!
Gift cards are usually out in the open at stations (like the ones mentioned above) or by the checkout register. They have at least one safeguard in place to protect the purchase: a scratch-off bar with a unique card number and/or PIN. It’s important to check the back of your gift card when you buy or receive it to ensure that this scratch-off area is intact. If it’s not, alert store management if you’re the one buying it, or let the person who gave you the gift card know.
Thieves can easily scratch off these boxes and copy down card numbers. Then, they either put the gift cards back at the register or even place a replica “scratch-off” sticker over the area.
If they do the latter, it might be hard for you to even notice that the card has been tampered with… unless the funds are swiped. That’s why number three is so important.
Register the Card Immediately and/or Change the PIN
Many gift cards will allow you to create an account and register them online. This protects you in case the card is lost or stolen, but will also protect you in many cases if the funds are fraudulently taken.
Depending on the retailer, you may be able to use the card to load your account, then opting to pay from your smartphone when you want to make a purchase (Starbucks is a common one for this). You may also be able to change the card’s PIN, further ensuring that thieves won’t be able to use your money from afar.
Keep the Receipt
Every time my grandma gives me a gift card, she includes a receipt (often a gift receipt). I used to think this was silly, until I lost a gift card and needed to get it replaced – without that receipt, I would have been out of luck!
A receipt will show the gift card account number. If your card is compromised in any way, you can use that to contact the company directly with a dispute. Many times, they can replace the card for you or deactivate the defrauded card… but they can’t do that unless you have the card/account number available.
Pay With a Credit Card
Lastly, if you’re worried about fraud – with gift card purchases or anything else you’re buying this holiday season – using the right credit card can offer peace of mind. If you are scammed; your purchase is lost, stolen, or damaged; or you are unable to return an item within a reasonable window, your issuer can step in and help. You won’t find that kind of protection when buying a gift card with cash or debit.
Gift cards are all the rage these days, allowing recipients the flexibility of picking out the gifts they want most. Unfortunately, this means they’re also prone to fraud. By taking these steps, you can help protect yourself – and your giftees – this Christmas.