Gift card scams?
I've been hearing from people about how gift cards from businesses can easily be scammed, but I just don't see how that can be done. I mean, they're not activated until you buy them, and then they're just stored-value cards, right? Can you explain?
Well, I don't know that I want to get the reputation of being an expert criminal mastermind, but I did recently read about one ingenious method by which companies like Wal-Mart, Target and The Gap are encountering problems with their gift cards.
The key is that gift cards each have a unique serial number in the magnetic strip and then the gift card management system uses a centralized computer to track outstanding balances and usage.
Without any scams involved, it works great and if you know the unique ID number of your card, you can even call up and report it stolen, without losing any of the remaining balance.
The problem arises when you realize that small handheld mag-strip scanners are inexpensive and easily acquired. Now imagine this: a criminal has one of these devices in his (or her) pocket and walks into a store that offers these plastic gift cards.
They grab a big handful of cards as if they're a big spender, wander into a quiet corner (or a dressing room), then quickly scan each and every card to record their unique ID numbers. Then they're done with the cards so they put them back on the display or leave them on a shelf for an unsuspecting employee to put away.
Now that afternoon you innocently traipse into the store and pick up one of these tainted cards, "charging it" with $500 for your sweetie.
That's where the problem arises. The criminal can easily buy a gift card and charge it with $5, then reprogram the mag strip to match your card ID number (which they'd previous scanned and stored) and merrily shop until your balance goes to zero.
Now, how would they know when your card is activated and how much is left on it? Because all of these stores that offer plastic gift cards also offer a system where you can check your card balance via telephone with just the ID number. Every 4-5 days the criminal checks the balance on their stack of card IDs, and once one goes golden, they either start shopping or, worse, perhaps offer it for sale on a site like eBay.
Either way, I'm not sure that I'd be purchasing plastic gift cards for any of my friends with this sort of exploit so relatively simple. There are better and safer ways of sharing your affections.
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Reader Comments To Date: 58
Or one could steal the unactivated cards and resell them to consumers who think they are valid.
Give cash (or a check). Or make a gift yourself. Many times the gift cards I get are for stores that aren't anywhere near where I live or work. Usually I can buy things more cheaply and with a wider range of choices online, so cash or a check is a better gift for me.
I purchased gift cards a few years ago at a physical store and fell prey to this scam. $600 down the toilet. So, I thought about it and found that there is a really good way to make sure that you avoid this scam:
Buy your gift card directly from the website of the store (walmart.com or target.com or whatever) and have it shipped from there either to you or to the receipt point. It adds a few days, but is a great way to make sure you've got pristine plastic gift cards that no one has tampered with. I haven't had anything happen since I started doing that.
Gift cards are only gifts for the card issuer! I just received a $100 Visa Gift card. The giftor paid $102.00 to buy this "big hassel" card; it's only good at merchants that take Visa debit cards; the card holder must keep track of the amount left on the card by e-mailing the issuer or calling them; it won't work at gas stations where you would like to pay at the pump - you must go inside before pumping your gas and tell the cashier the exact $ amount you want to purchase; and finally the fine print says the card will expire when the balance amount falls below $50. What a waste! I definately would have much prefered a simple check for $100.00 or $100.00 in cash.
If I started my own business (e.g., with 2 or more stores) is it possible to offer "closed system" gift cards where people could get cash back on unused balances?
The idea is that I could open a small store in Seattle and put some value on a card. Then I could go to my other store, say in NY City, and get the cash out. Is this possible?
If I also had a store in Mexico City could this work across the 3 stores?
It is my understanding that you cannot get cash back on the card. I have heard of businesses that will merge multiple cards onto 1 card though. I don't see where you would make money on such a business though... unless you offered 50 or 75 cents on the dollar when you buy back the remaining amount.
THIS IS HOW PEOPLE ARE STEALING AND USING TARGET GIFT CARDS OR AT LEAST HOW I THINK THE ARE BEEN USED SINCE I HAD THIS HAPPEN TO ME TARGET DOES NOT GO AFTER PEOPLE WHO USE STOLEN GIFT CARDS ONLINE OR DO ANYTHING ABOUT IT IF YOU BUY THEN TRY TO USE IT ONLY TO FIND OUT IT HAS ZERO BALANCE THAT IT WAS USED ONLINE. HERE ITS HOW IT IS OR AT LEAST HOW I THINK IT CAN BE DONE TARGET GIFT CARDS HAVE NO SCRATCH OFF ALL NUMBERS NEEDED TO BUY ITEMS ONLINE ARE IN PLAIN SITE ON THE BACK OF THE GIFT CARDS ALL SOMEONE HAS TO DO IS TAKE THE CARDS FROM THE STORE SINCE THEY ARE SCATTERED ALL OVER THE STORE IT IS REAL EASY THEN AFTER YOU TAKE THE CARDS HOME YOU GET ALL THE #'S THEN RETURN THE GIFT CARDS BACK FROM WHERE TOOK THEM FROM THEN KEEP THEN TRY TO USE THEM ONLINE TILL THEY GO THROUGH,TARGET GETS THERE MONEY THE PERSON WHO LEGITEMLY BUYS THE CARD IS OUT OF THE MONEY HE SPENT ON THE CARD AND THE THIEVES HAVE THERE TARGET MERCHANDISE ON THERE WAY. AND SINCE THE THEIVES HAVE ALOT OF TIME TO DO THIS BEFORE THE RECEPIENT OF THE GIFT CARD EVEN TRYS TO USE THEM. I KNOW WHEN I GET A GIFT CARD I DO NOT USE IT RIGHT AWAY SO NOW WHEN I BUY A GIFT CARD I CHECK TO SEE IF IT HAS THE #'S HIDDEN OR HAVE THE SCRATCH OFF SYSTEM
This scam is very old, and has been exposed. Now virtually every gift card sold in retail stores has a hidden number that needs to be either scratched off (like a lottery ticket) or a piece of the cardboard packaging peeled back. It will be immediately obvious if somebody has already looked at the number, and you shouldn't use that one.
Ever since then gift cards are a very secure way of giving gifts.
Don't purchase Gift Cards issued by Net Spend and sold at Vons/Safeway they are a rip-off! They incorrectly have debit emblazoned on the front of the card and the merchant must enter credit or it will be declined and you will be charged $0.50! Don't even try to leave an e-mail, it won't recognize "characters"....alpha-numeric! So I am launching my public education campaign! DO NOT PURCHASE VISA GIFT CARDS ISSUED BY NET SPEND!!!!
I think that this has happened to me. I purchased a $100 card Sat. @ Wal-mart. The card came from the register stand but it was accessible to the public. I went to go used it last night on a Friday (6 days later) for gas & the pump said it was empty! I had a fit! The transaction reflects that on Wed. the Asst Mgr at Wal-mart cashed it out.Which is against their rules to get cash from it. I am ticked to say the least! I had better get my money back! But I think that I wont be buying those gift cards at Wal-mart anymore. Trying to save .03 cents on gas isnt worth losing hundreds of dollars. I wonder how many gift cards may have been fraudulently used up that people weren't aware of their balance? Cost-Co sells the cards from behind the register or in a plastic container so that it has to be activated. Now I know where to go for these cards if I wasnt them. Thanks for your help.
This just happened to my fiance. I got him a vanilla visa gift card from CVS worth $100 he was saving it so he could get something big when he saved enough money. He ended up needing it for gas yesterday and was told it was empty. I checked the information on line and someone used his account the day after I purchased it. Vanilla visa said they could do nothing and that I would have to take it up with the company they got something from. They don't even care that people are doing this to their cards
i dont understand i purchased a vanilla girft card so i can use it on the web thinking i could use it on the web because i had purchased a green dot visa card a few months ago & lost the card so i thought the vanilla would be the same as the green dot IT'S NOT!!!! i called them up so they could input my personal info like name & address and they said they do not do that, that the card is completely annanomous OK so then how can it be used on web sites that ask for ur name and address?? and if you want to buy somthing from the web every site i have been on ask for ur name and address and if they dont put that info on the card then the card cant be used it makes no sence to me at all I think this sucks now i have a 50 doller card that i cant use on amizon this isfalse advertsement and im calling the better buisness burough
I'm in the same boat with a $50 Vanilla Visa Gift Card. I bought it to use for online subscriptions, but they won't accept it without verifying my address; which Vanilla Visa won't store.
For NETSPEND cards, I was trying to pay my ebay fees (I just closed my EBAY account, I think their suspension guidelines are very arbitrary, NOT taking account of special situations. Way too frustrating!! Also, PAYPAL SUCKS! Their chargeback is a SCAM. PAYPAL allows unscrupulous buyers to DEFRAUD the system, leaving sellers hanging dry. I fought back! I closed my bank account that I had on file with Paypal.My credit is already messed up!
One more collection against it ain't a big deal. At least paypal won't have instant cash from me. Aiding thief buyers to steal!!) I came to this forum because I was looking for a way to find an alternative ID in order to sell my stuff on ebay ,eventhough sucking ebay suspended me. It's still the best play to sell certain stuff to many potential buyers! I guess ebay knows their supremacy and that's why they don't give a damn about suspending people for any pedadillo. Any little thing!!!
But, NETSPEND is okay. It has replaced my paypal card. And I don't have to wait for 3-5 business days, like paypal!! to put money in it. I just go to the check cashing place and put money on it. The joy is living near cities!!
You cannot find the balance on a walmart gift card until you enter the pin number on the back of the card. You cannot find the pin number until you use a coin to see it. I use the gift cards all the time and have no trouble with them at all.
There are still visa gift cards that do not have a hidden unique ID being sold, and these scams are still happening. I just purchased 2 $100 visa cards last year for my boyfriend, and one of them ended up with a zero balance after someone purchases software online with it. The Visa company who benefit from the sales of these cards did nothing about it. They claimed they could only refund money if I had kept the sales receipt to the card, and could show that someone other than myself used the card. This made no sense to me considering they were called "gift cards", so obviously someone other than the purchaser would be using the cards. Visa does not care as long as they are getting their money. My suggestion would be to just give cash or write a check.
Just don't put large amounts on one gift card. Buy multiples of $5, $10, or $20. You wouldn't walk around with $500 cash. I'm sorry, but anyone who puts $500 on one gift card isn't very bright to begin with, so it's not like these criminals have to be geniuses.
NETSPEND ARE THE BIGGEST RIP OFF CARDS AND -- You better believe I am on their trail. My daughter is in Quebec Canada right now with NO money because of them. We gave her a 100 card. We activated it. We did exactly what they said to do and it has been declined each and every time. IF they think that some merchant is going to take the time to read the book of directions to find out how the heck to use it....or that my 14 year old is savvy enough to figure this out.....they have another thing coming. I have reported them to the BBB and my next stop is ABC NEWS....NETSPEND>>>>YOUR DAYS ARE NUMBERED> I also called the grocery store where I purchased it and told them our story as well. BE SMART DO NOT BUY THESE CARDS...
They cost $6.00....Then on every dollar you spend...they charge you a dollar.....SO.....you are being RIPPED OFF>>>>>>RIPPED OFF.....
I AM ON THE WAR PATH>>>>WATCH OUT>>>>>I WILL SEE JUSTICE DONE>>>>>
I think a huge issue is that people don't keep track of their cards. I know I struggle with that issue. I just have these cards in my wallet, and one time I lost my wallet, and just like that everything is gone. during this past christmas season, i was watching the news and i saw this site called leveragecard.com you get to register and check your gift card balances for free, and they give you interest! i wish i could have known this before i lost my wallet.
how do i get a mag-strip scanner???
Anyone who buys a gift card is simply not very bright to begin with. Why would I transform United States legal tender into an inferior form of cash that is either restricted to one merchant, or has hidden fees? Sounds stupid to me.
Because Stephen Chen not everyone has credit cards, and without a credit card you can't buy anything online unless you have PayPal which ALSO requires a credit card. So you shouldn't really be saying anyone isn't bright when you don't even think things through.
And Kristina I don't know of any gift card that is for $500. Another "not bright" person too.
Vanilla Visa is a rip off,I agree. I lost $50 on a card. They claim that the sent a refund check which I never received. The customer service reps are rude and un helpful. They clearly are out to make a free buck.
Um actually you guys are incorrect. Or maybe its just my stores... but like the vanilla gift card i just purchased was wrapped tightly, so that if anyone did that magnet thingy it will be noticeable and the seal will be broken. This hints "Recorded Number" to anyone trying to purchase it. So yeah. I looked at the other gift cards too, they were sealed tightly like the other ones. However, I noticed the wal-mart gift cards to be non-wrapped if thats what you guys are talking about.
damn dave dont tell people that sorta stuff let them figure it out from someone other than you. im sure there are plenty of other websites and ways they can get help if they need it. you probaly just made a few more criminals. giftcards werent that big until like a year ago, most people dont even know where to by that sorta machine so shhhhhh it , anyway thanks for all the help youve provided over the years.
VISA cards can be activated and once used, there are some places where the limit on the card is not adhered to. Try getting $40 of gas on your $25 gift card! The end is nigh...
I have to agree with a lot of people on the Visa Vanilla gift card. What a ripoff. I bought a $50 card hoping to buy something online because I don't have a credit card and did not want to compromise such personal information online that is directly tied to future chances of me ever being able to buy a new car or a house (especially after hearing stories about credit card numbers being stolen from merchant websites after being hacked). I tried to buy something online and it turns out I can't use it. Like someone else said before, you can't register your name or address (only your zipcode) so there is no way to verify your identity to the merchant and have things sent over to you. I live in an urban city but it nothing like New York where you can pretty much buy anything you want within walking distance. There are things I need I can't get in my city. Information came with the card saying I could use it to buy things online.
I GOT AN EMAIL SAYS I WON A 500.00$ WALMART GIFT CARD BUT I CANT GET TO TE PAGE TO PUT MY INFO IN IS IT REAL WHERE CAN I FORWARD IT TO FIND OUT TY
Jessica, you can use them to make online purchases, but you have to register them through visa before you make your purchase so they have your info in their database to verify against for the online merchant.
omg, thanks so much guys! I've been thinking about getting a fifty dollar vanilla gift card cuz i've seen it at like drug marts and stuff. Cuz i wanted something online on aeropostale, but they dont have it at the store closest to my house. but now i think ill settle with just getting the gift card from the store then spend it online and settle with that. thanks guysss
Cherryl, beware of free moneys offered by emails!
Just think about no one is throwing $$ thru the window . It's amaizing how much moneys I "got" by the email lately . From different sources , and all of them are trying to get some advance $ for the expenses of sending me the "fortune" via any some costly courier (paid upfront of course) ...
I got a Visa gift card @ walmart for my son so he can order from the internet. Before he even looked at the card $3 had been charged off, and the the internet company would not reconize the card (yes, he registered it as told). There is no way to contact anyone for the card. The phone # provided is only a recording. This whole thing is a rip off!!
Recently, i got an offer on getafreelancer.com. I mean i have bidded on that. He wants an reputed ebay account to sell his stuff and he is ready to share 10% profit excluding paypal and ebay insertion fees.
I got an email stating that i have to sell these Gift cards. Does it involve any scam? I am smelling something wrong.
He also can sell this gifts cards directly on ebay without needing anyone.
Big thanks for sharing and for comments
THE ONLY PROBLEM IS WITH VANILLA VISA GIFTCARDS! THE OTHER ONES ARE FINE.
why do you say this no some dumb guy is going to know this and do it! now gift cards are more unsafe then ever i mean who could have thought of that!
I NEED TO KNOW IF I CAN PURCHASE ANY RELOAD CARDS FOR NETSPEND OR ANY OTHER ONES ONLINE.. I DON'T WANNA GO 2 D STORE AS I AM UNABLE 2 MOVE AROUND..
Chaiman, you sure can purchase gift cards online, it is a safe convenient way.
"Because Stephen Chen not everyone has credit cards, and without a credit card you can't buy anything online unless you have PayPal which ALSO requires a credit card. So you shouldn't really be saying anyone isn't bright when you don't even think things through.
And Kristina I don't know of any gift card that is for $500. Another "not bright" person too.
Posted by: Megan at March 6, 2008 1:49 PM"
I agree with StephenChen. A gift card restricts the person you are giving the gift card to to the cardholder aggreement/restrictions of an inferior banking merchant's polices solely for the benefit of online transactions. Plus, online purchases made with with an actual credit/debit card carry faster, more efficient, consumer protections against fraud whereas a gift card does not-it's like cash. If it is stolen or used by someone else, then you're just out of luck or hard pressed to prove it was not you that made the purchases-as oppose to the ties of your identity with a debit/credit card.
There are no gift cards for $500 but you can purchase a reloadable visa card and put that amount on it if you wish then give it to someone as a gift.
Thanks. Really eye opening. Don't think I'll be doing the "gift card" thing.
got a green dot student pack visa gift card from wal-mart.My son wanted to buy an item on ebay. What a nightmare!would not activate on-line because their site was having problems, it said please call customer service to activate.I called them, got it activated, then when on-line to check the balance and it charged me 6 bucks to talk to customer service, which was thier fault. then a ten dollar a month fee came off immediately. oh yeah, and don't forget the six bucks i paid at the register.Wanna buy something for 100 bucks? better put 130 on the card. btw, try to call and complain, THAT'S ANOTHER FREAKIN SIX BUCKS! you'd be better off to pay 18% interest on a real credit card!
i went to walmart.com and this thing came up saying that i won onethousand dollars and to put my email adress then my house adress then my phone number. So i did then this survey came up asking me for my helth information and other stuff so then a wonderd and thought some thing was wrong so i loged off then a few minutes later this tex came to my boyfriend's phone saying obama sined a stimulus packege that would give him money.so we just ignored it but then this second tex message came saying that he won 100 dollars. would walmart really do this or i just clicked on the wrong wed page? because it did say walmart official site.I don't know i need help please HELP ME I NEED INFORMATION PLEASE!!!!!!
oh and another thing i did not go through the survey i just put my name & phone number then clicked ok then when i saw this survey with this weird questions i loged off but then this happend i got tex 2 messages this sucks. PLEASE HELP ME I NEED INFO ON THIS KIND OF STUFF. you guys might think i am gettin weird.
I received an email today about my upcoming birthday and how i was eligible to receive a $250 visa gift card to use anywhere. So, i got sucked in and clicked on the offer, only to be suckered into signing up for 2 of the 30 offered deals that would supposedly make my eligibility complete. After signing up for these 2 "deals," my debit card was charged for both of them, but then the site directed me to yet another page telling me that i had to sign up for 2 more deals to receive my gift card. I am very angry, yet i realize i shuld have known better. now i have to call these 1-800 numbers to cancel on those "deals" that i sgined up for before they charge me outrageous monthly membership charges. DAMN!
you are about to be the victim of a cyber crime.. DO NOT SELL ANY ITEMS FOR HIM ON EBAY - let me guess, he is saying that because he is in a foreign country he cannot sell them? what he does is tell you he will have the items shipped (but they never are) and you forward him the cash while everything is done under your name leaving u holding the bag...look it up this type of thing is common
If you lose a gift card is it possible to track it down using a transaction id number ?
People, NEVER get into so called deals with people from other countries!!!!!!!!
How dumb can you be to trust someone from another country that you never met before!
NOTHING IS FREE!!!!!!! DON'T TRUST SOME FOREIGNERS ESPECIALLY WHEN IT COMES TO YOUR MONEY!!!!!!! THEY ALL SCAM!!!!!!!!!
I also bought a visa gift card and lo and behold I'm having huge issues with it first I tried to register it on line and unlike other cards I've used in the past the VANILLA GIFT CARD doesn't allow you to fully register your card. Also when I tried to use my card on line my purchase was declined which tied up my funds and via e-mail only way to contact them found out that it would take 7 days to return my funds.So i bought a 100.00 gift card and now I have 15 dollars and some change what a scam this is if I had known this I never would have bought this card.I've bought several cards in the past and never had this kind of problems always had live people to talk to and always had full registration of card. MY ADVICE IS TO NOT PURCHASE THIS CARD UNLESS YOU DON'T MIND TYING UP YOUR FUNDS FOR SEVERAL DAYS!
Great info. Many people dont know this. I've learnt the hard way about a year ago. What a rip off.
Everyone should be very careful when when purchasing Target Visa Gift Cards because I got scammed!
I purchased eleven $100 Gift Cards for the Holidays. I made this purchase at the Burbank CA. Target Location. When i bought these cards, I opened them to use one of them, when i tired using it, it would decline the card so i was forced to open another one- yet again it got declined. I was forced to go back to Target and tell them what is going on with their cards. They very rudely told me that it is not their fault and that i should speak to Visa. After going back and forth i realized that the number scanned at the cashier to activate me gift card did not match the one on the reciept. I also noticed that on the bar code that is being scanned (to activate the card) there is a sticker-another barcode. I am guessing that these stickers are barcodes to activate other cards BESIDES MINE!
No i am in big problem waiting for answers from Visa. I am warning warning everyone of this problem because i dont want it to happen to you guys. So when buy, please make sure every number matches on ur gift card and your reciept.
have you registered the card?
i bought a visa gift card from safeway and it works after registering it online and it is great for ordering online
i always get my visa gift cards from the bank...i do it every month and never once had a problem
I have a business that accepts Visa gift cards. These cards are packaged so no numbers are exposed to the public until the card is purchased. It says debit on the card but I always run it through as credit and have never had a problem. Although you must know your balance to prevent it from being declined.
One other thing, mail your cards to me and when they clear, for a fee of course, I'll run them through.
Can't the police just track the visa gift card to were ever it was used? Example if they use a gift card to buy a different gift card , aren't there tracking numbers to help lead the cops to the person?
Bruce, sounds good in theory, but the reality from what I keep hearing is that cops are just too busy with "real crimes" to worry about these sort of scams, so the end result is often that there are no investigations or prosecution.
Well have y'all heard of square up? With square up people can deposit visa gift cards into there account, which means if I buy a $100 visa gift card from craigslist for a discounted price of let say $60, then swipe the card using square up and have the money put into my account, that means I make a $40 profit. The question is if I get the card from some stranger on craigslist and I check the card buy calling the number on back to make sure the money is there before giving the person the cash am I safe if the visa card was stolen? Can the card be track to my bank account if it a visa gift card? Or can I get in trouble for getting the card from the unknow person? I mean. I would think people get gift cards all the time for presents and what not , so i should be ok if a person wants to sale his card for a discount price I would think?
people have been doing this for a while, you're not a 'master criminal'
TIP for Facebook users: To use a Vanilla Visa on Facebook, you have to register it with Facebook's zipcode: 94304. I know it sounds crazy, but call Vanilla Visa if you don't believe me. I was getting really angry, because every time I bought a Vanilla Visa, it wouldn't work on Facebook, and I'd have to call customer service for them to "fix" it. Finally the last agent told me about the zipcode thing. Yeah, thanks for being a douche Visa.
I personally prefer the Pre-paid Master Card. I don't think I ever had a problem with one. They do let you register your name and address, so you can easily use the card online, and keep track of your spending.
I do have a lot to say, and questions of my own for that matter, but first I'd like to say thank you, Dave, for all your helpful information by
buying you a cup of coffee!||
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