Gift Card Scam Warning-Truth!

Summary of eRumor:


A warning that crooks are taking down the card numbers of gift cards in retail stores before they are purchased and activated–then later going online and using the activated cards for shopping sprees.

The Truth:

The story is true and the procedure has been used by crooks, but it’s not clear how widespread it is.  So far the warning seems to be larger than the problem.

One of the alerts was sent by the Hanover County Sheriff’s Office in Virginia, which confirmed with that the story is true.

Here are the facts:

Gift cards are frequently found displayed for sale in retail stores, but they are useless until they are purchased and activated.  The activation also determines how much money is on the card.

According to the eRumor, thieves are copying down the numbers on the unsold cards..  Some of them, for example, may grab a handful of from a display, go into a restroom to copy the information from them, then return them.   Some cards have personal identification (PIN) numbers on them but they are hidden under a scratch-off covering.  Some of the thieves go ahead and scratch that off so they can have the PIN numbers as well and unless you are aware of that, you may not notice that the PIN number was once concealed.

Later when the cards have been purchased and activated, the thieves will use the cards, typically for purchases online.

So there is the danger that a gift card that you purchased may end up being worthless because the money will be gone before you spend it.

The eRumor recommends that you get a gift card from an employee behind a counter rather than use the ones that are displayed for all to see.

Retailers have been tight-lipped about the problem, presumably because they don’t want to give visibility to the idea so it is hard to judge how widespread the problem is..  Joseph LaRocca, vice president of loss prevention for the National Retail Federation, says there is concern about gift card fraud but that the losses he’s aware of have been “miniscule.”   And most of those have not been the result of stolen card numbers but rather from crooked employees such as store clerks or restaurant servers who give you back a blank card when you have given them a full card to use for a purchase.

LaRocca also warned against buying gift cards being offered online by private parties.  Consumers have been tricked either by receiving cards that did not have the values that were claimed or were gift cards that were purchased with stolen credit cards.   LaRocca said that a couple of years ago retailers did a survey of gift cards purchased over the Internet and 70% of them were either purchased with stolen money or were not the value that the purchasers thought they were.

A Washington resident told KOMO-TV in Seattle that she and some friends from a church group chipped in for a $150 gift card from Wal-Mart as a gift to a colleague.  When the friend tried to use it, she was told that the card was empty and that someone else had already used it.  Another woman told KOMO that she had the same experience but with a $25 card.  It had been purchased in Olympia, Washington, but used by a stranger at a Wal-Mart in Chehalis even though the woman had never let the card out of her possession.

Updated 11/29/06

A real example of the eRumor as it has appeared on the Internet:


Fw: Gift Card Alert!!!!!

Well the crooks have found a way to rob you of your gift card balance. If you buy Gift Cards from a display rack that has various store cards you may become a victim of theft. Crooks are now jotting down the card numbers in the store and then wait a few days and call to see how much of a balance THEY have on the card. Once they find the card is “activated”, and then they go online and start shopping. You may want to purchase your card from a customer service person, where they do not have the Gift Cards viewable to the public.

Please share this with all your family and friends…