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.