No need to send a letter to the North Pole — Santa already knows what you want. For the fifth consecutive year, gift cards remain the most requested present, requested by a record-breaking 58 percent of holiday hopefuls, says the National Retail Federation.
On average, gift card givers buy four cards, with an average value of $35. But because of some clever scams, recipients may end up with nothing but a useless "grift" card.
In the best-known ruse, thieves visit display racks to collect identifying information on gift cards that haven't yet been sold and activated by a cashier. When no one's looking, they copy the card numbers and scratch or peel to find hidden code numbers. The cards are then placed back on the rack for purchase by unsuspecting customers.
The scammers then periodically check the issuer's toll-free number to determine when a particular card is activated and for what amount. With that final information in hand, the thief can make online purchases, and there's no need to have the actual card for that.
A less common variation focuses on cards whose activation codes are printed on the envelopes they're sold in. The crook carefully opens the envelope and swaps the blank card inside with a used one. When a customer picks up that envelope and takes it to the register to have the card activated, it's the stolen blank card that actually gets the value, not the one in the envelope.
And increasingly, thieves are going high-tech. They buy tiny card reader devices on the Intenet, then carry them right into stores. Taking a card from a rack, they surreptiously scan it to copy electronic information from its magnetic strip, then put it back on the rack. Once the card is bought and activated, the thief makes a duplicated cloned card for an in-store shopping spree.
Think you can avoid trouble, as well as crowds, by buying gift cards online? You can if you do it right.
Gift givers buy these "ecards" on the Internet and they show up in the recipients' email inboxes. The virtual cards can pay for online purchases or be printed out and taken to the store.
Buy the cards directly from the retailer's website and you're likely to be OK. But buying them at online auction sites can result in the delivery of ... nothing, or worthless counterfeits or cards with value a fraction of what was advertised.
Gift cards are also sometimes bait for identity theft.
You might get a phone call or email alerting you that you've won a gift card. All you need to do, you may be told, is provide your credit card number to pay a small delivery fee. The scammers get that money and can also make fraudulent charges of their own on your credit card account.
Or the gotcha may be a link that unleashes malware onto your computer or leads you to a survey asking for personal information that scammers can use for identity theft. Although some legitimate retailers do provide gift cards for completing surveys, they will never ask for information such as your Social Security or credit card numbers — and they don't charge fees for delivery or anything else.
In still another version, you're instructed to call a certain phone number to claim your card, only to be tricked into outrageous charges because you're dialing a foreign country with faux-American area code or to be hassled into buying unwanted goods or services. Of course, no gift card ever arrives.
Gift card security tips
So if gift cards are on your holiday shopping list, how can you ensure your giftee doesn't get the plastic equivalent of coal? Follow these steps.
- At stores, try to buy from a rack that's behind a counter staffed by a store employee — there's less chance a thief can tamper with these cards. If you're buying from an out-in-the-open display rack, make sure the card's packaging hasn't been tampered with. Make sure that any peel-off sticker over a code is firmly in place.
- When paying for a card, make sure the cashier scans the card in your presence and contains the value you paid for. This can help you avoid yet another variation of gift card scam in which the clerk only pretends to activate the card, hands it to you and pockets the money you provide.
- Always get a receipt for yourself as well as for the card recipient. Most retailers can track where their gift cards were purchased, activated and used, so if yours has been hijacked, having a receipt will usually qualify you or the recipient for a refund or replacement.
- Online, buy directly from websites of the issuing retailer. If possible, register the purchase at that website. Not all retailers offer this option, but it will help bring to light any misuse of purchased cards more quickly (and means fewer hassles in resolving it).
- Delete emails and hang up on phone calls claiming you've won a free gift card.
Sid Kirchheimer is the author of Scam-Proof Your Life, published by AARP Books/Sterling.