Stores work to stop new gift card scam

The balance on people’s next gift card could read $0 before it even reaches their hands. \nThe National Retail Federation, the world’s largest retail trade association, recently brought attention to a new gift card scam and detailed how consumers could lose money from gift cards if criminals steal the card numbers from the back of the card.\nThe scam could be potentially devastating for many consumers and retailers, said Linda Carmody, CEO of the Better Business Bureau in central Indiana. \nIn a study conducted by Comdata Stored Value Solutions, it was projected that during the 2007 holiday season, the average gift card buyer spent $203 on cards, a $17 increase from 2006. The estimate for total gift card spending was $35 billion. \nWhile rare, gift card scams can mean trouble for consumers and retailers alike. Some stores leave unprotected gift cards lying around with the gift card number clearly visible to anyone who walks by, Carmody said. The thief copies the number down, waits for the card to be purchased by an unsuspecting consumer, and uses the numbers, most likely online, to purchase items. \nThe consumer then attempts to use the gift card only to learn that the balance is zero. Naturally, the consumer blames the store for issuing a faulty card, not realizing the money was stolen, Carmody said. \nMany stores, such as Barnes and Noble and Borders bookstores, have implemented sophisticated safeguards to prevent thieves from obtaining and using consumers’ gift cards.\nCarolyn Brown of Barnes and Noble said it would be impossible to copy down the numbers. Brown said Barnes and Noble has security measures in place to prevent gift card scams. She was unable, however, to discuss the exact nature of those policies.\nBorders spokesperson Kolleen O’Meara said the company has never had an issue with gift card fraud, mostly because of the way the cards are manufactured. There is a strip on the back of the card that has to be scratched off in order for the number to be visible, O’Meara said. \nThe staff is trained to identify cards that have been tampered with, and do not issue such cards to consumers, O’Meara said.\nO’Meara said that if theft occurred, there is a system in place that tracks the card down and the company would return the cost of the card to the purchaser. Borders will always be willing to help consumers get their money back, O’Meara said.\nThe National Retail Federation gives advice to consumers when making gift card decisions.\nFirst, it encourages consumers to double-check the section on the back of the card where the personal identification information is before they purchase it. If it appears to already be scratched off, take it to a customer service representative. \nNext, only purchase gift cards from reputable sources and not online auction sites where they are likely to be counterfeit or fraudulently obtained.\nAny time people purchase a gift card, they should keep their receipt, Carmody said.