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Why Gift Cards Are Gold Mines for Scammers, Part 1

Many people see the racks of gift cards as convenient last-minute gifts. But criminals see a tool to steal money

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Full Transcript

[00:00:01] Bob: This week on The Perfect Scam.

[00:00:03] Bob: Would you mind just, you know, reading off 7 or 8 of them to me?

[00:00:06] There's an Apple gift card that I got from 7-Eleven, that was 500. I have a $500 Best Buy card, and I purchased it at Best Buy. I went to Kohls, to Sephora, and I bought $1000. Here's another, some more gift cards from Target for $500. There's a $2000 from Nordstrom's Rack.

 [00:00:30] How many of us just go through our daily lives and see that gift card rack and don't think two seconds about it unless we need to buy a gift? Where else are billions of dollars being lost to criminal enterprises?


[00:00:45] Bob: Welcome back to The Perfect Scam. I'm your host, Bob Sullivan. For many people, those colorful racks of plastic cards at retail checkout lines representing easy, last-minute gift for someone. But to criminals, they represent opportunity, perhaps the most efficient tool they found to steal money from unsuspecting consumers in a way that's untraceable and irrevocable. And for a growing number of Americans, gift cards represent a financial nightmare. The Federal Trade Commission said recently that Americans report 50 million dollars in losses to gift card fraud every three months, more than double the amount from 2018, and that's just the losses that are reported. So today, we begin a two-part special report on the problem of gift cards. First, we're going to meet some gift card victims and let them tell their stories, then we're going to tell you about a brand new study conducted by researchers at the University of Minnesota, sponsored by AARP involving undercover shoppers who tested store gift card security measures. The results are pretty shocking. But first, let's meet Henriette. A criminal stole hundreds of thousands of dollars from her family, and when he stole everything she had, he turned to gift cards so he could steal even more.

[00:02:13] Henriette Schmuhl: My name is Henriette Schmuhl, and I'm in North Aurora, Illinois.

[00:02:18] Bob: And where is North Aurora?

[00:02:19] Henriette Schmuhl: It's outside of Chicago about 45, 50 miles.

[00:02:23] Bob: So it's part of the larger Chicagoland, right?

[00:02:26] Henriette Schmuhl: Right. Right, that it's west of Chicago.

[00:02:31] Bob: And how long have you been there?

[00:02:32] Henriette Schmuhl: Oh, we've been here since around 2000.

[00:02:35] Bob: Since 2000. Where did you move from before that?

[00:02:37] Henriette Schmuhl: California.

[00:02:39] Bob: Ooh, that's a big change.

[00:02:40] Henriette Schmuhl: Yes, yes, but actually I was born here, born and raised here, and then I moved to California. I lived there for about 30 years, and I married my husband out there. He's from Michigan, so we settled on Chicago because that's where I was from, and we moved back here after the kids grew up and left the household.

[00:02:57] Bob: Henriette is in her Midwestern home alone one morning when a phone call arrives and sends her into shock.

[00:03:05] Henriette Schmuhl: It was about, yeah, about 9 o'clock, 9:30, and it's, the thing is, I generally don't answer phones, my house phone. They called on the house phone. I don't generally answer it if I don't know who it was. Or who it is. And when I saw that it said, "US Customs and US Security," I went, oh, I should answer this. This must be something important.

[00:03:28] Bob: After all, her phone told her it was important. On the other end of the line is a man who said he was Andrew Paul, a Sr. Investigator with Homeland Security.

[00:03:40] Henriette Schmuhl: He told me that he had an arrest warrant for me, for money laundering and drug trafficking. And he showed me the arrest warrant. We were, I was able to verify that where, 'cause he told how to find the site, so I went to the site to prove where he was from, found his name on the site, so I thought, okay, it must be right, yeah, but all the time, like I'm crying the whole time. I said, "I've not done anything wrong."

[00:04:11] Bob: The investigator asks Henriette if she'd ever been to Charlotte, North Carolina. She had been for work where she'd rented a car. And then tells her she's in big trouble. Police have found a car there registered in her name and it was full of cocaine.

[00:04:29] Henriette Schmuhl: Besides showing me that arrest warrant, he showed me the car that was in Charlotte, North Carolina, that had the 21 pounds of cocaine found in it at an apartment that was supposed to be under my name, and bank accounts that had large sums in it under my full name. And I thought, wow, this is crazy. I thought, I can't, I just don't know how this could be. He says, "Well it seems like someone you know has given your identity out, so you're a victim of identity theft." I go, "Okay." And he goes, "What my job is," he says, "I, I can see that this is wrong, and I want to help you to prevent going to jail for this."

[00:05:13] Bob: I want to prevent you from going to jail for this? Henriette doesn't know what to think, what to do.

[00:05:20] Bob: This seems like, like so much to digest all at once. That's what, that's crazy.

[00:05:25] Henriette Schmuhl: I know, it was like, I was just dumbfounded. I just, I didn't know what to do. I, actually I just, I just couldn't stop crying when I'm talking. He says, "You've got to stop crying and, and listen to what I'm saying." And I go, "Yeah, but," I said, "I've done nothing, I, I've done nothing wrong." And I said, "I, I just don't understand this. Why would somebody I know do something like this to me? It just doesn't make any sense." You know, so he kept showing me different things. He says, "Well, what I'm going to do," he says, "what we'll do is we will take your money and, and put it into another savings account after we change your Social Security number." He says, "But we've gotta have, you know we've just got to prepare for that. In the meantime I'll be, I'll work to make sure we, to guarantee that you were not the, you know, the one that did this." So I said, "Okay."

[00:06:16] Bob: And as Henriette sets about trying to prove her innocence to this man, well, it is remarkable how much he already knows about her.

[00:06:25] Henriette Schmuhl: He knew like where I graduated, when, what degree, and you know, that I graduated with honors. He knew the homes I have had sold, and bought and sold in California. It was like wow, you know, he knew where we had last lived before we moved here.

[00:06:42] Bob: Henriette has a fleeting thought about going to the police with her story, but the man on the other end of the line convinces her that's a bad idea.

[00:06:53] Henriette Schmuhl: So if any of my family got involved, they'd all be, we'd all be arrested at the same time. And if I went to the police, make sure I had a lawyer with me because I would need to get out, have a lawyer to help me get out if I could. So you know...

[00:07:07] Bob: If, if you went to the police, you'd get arrested right away he said?

[00:07:09] Henriette Schmuhl: Uh-huh, 'Cause I had the case number. He said, "Just give him your case number," he says, "they'll come and get you. You don't even have to go there." He says, "Once you're there, take a cop with you, or a lawyer with you because once you were, give them your case number, they'll arrest you on the spot. 'Cause it's a federal offense." I went, "Okay."

[00:07:27] Bob: She isn't even supposed to tell her husband, but she does. He's equally shocked, but agrees to help Henriette however he can. In order to clean up the mess from identity theft, the man tells her she'll have to start changing bank accounts. So Henriette and her husband begin to withdraw all their cash. When bank employees start asking questions, the man on the phone is right there with the answers.

[00:07:53] Henriette Schmuhl: I went to both banks, and drew out money. And took, you know, what I, they needed, you know, and of course everybody was so kind to make sure that I wasn't being scammed. And you know, did I know what I was doing? I said, "Yes, oh yes, I'm taking this out because we need it, we need it." And he'd tell me, "Tell them you're remodeling your house and you need this to pay for the down payments on, on some of the remodeling things." I said, "Okay." So we did that. He, he went with me on the cell phone everywhere.

[00:08:25] Bob: Then he tells Henriette to send the money to him via bitcoin, so it can be moved to a more secure account.

[00:08:33] Henriette Schmuhl: He took me to bitcoin machines which I never even knew existed in my life. And the first one we went to is a, a common area which, one of those multi-shopping areas where they have all kinds of discount stores. And I stood there in the food court putting money into this little bitcoin machine. And I was scared to death, that, you know, somebody, first of all, somebody I knew would wonder what I was doing there, secondly, like somebody could have, could hit me with this money in my hand, and I'm trying to run this machine, put money in, and hand, handle the cell phone at the same time because he had to give me the information to feed in to, to do this. But when we did this, you know, afterwards, he would send me the receipt for each one of the deposits. So I thought, oh, okay. You know I, he, he could prove how much money I put in, and then he sent me a, a copy of a, of the check that was to come in my name from Bank of America for the amount that I put into the, to the bitcoin machine that day.

[00:09:42] Bob: Over the following days and weeks, Henriette just about empties her bank accounts and her retirement accounts.

[00:09:50] Henriette Schmuhl: He put me down to like I think 3000 in my Roth IRA, and down to like 25,000 in my I--, regular IRA, and then I had a annuity that was for like 16,000, I had cashed that in. All of this was done without taxes, so now I'm having to, and he said, "Oh don't worry, we'll, we'll pay the taxes, uh, when we give you the check, we'll take care of all this, all these charges and stuff that you have. Don't worry about it, we'll cover all of that."

[00:10:22] Bob: And when nothing is left, he tells Henriette to take cash advances on her credit cards and buy gift cards with the money.

[00:10:30] Henriette Schmuhl: Well, we kind of ran out of money, so we started using my charge cards. So I had, we had to open up the, open up my credit on the charge cards that I had, and he would take, first he took money, you know how that you can take an advance on it, so he took advances from the accounts and put it in and started, I started using some money to put for bitcoin, and then started putting some of that money as gift cards. Then he said, "Well, you know, we might want to protect you a little bit more." So then I was just using the charge cards to get gift cards where I could. And I learned that, you know, Amazon cards, or not Amazon, Apple cards are the big ones. So I started staying away from Apple because people always questioned you, $500 on Apple and you know, "Oh no, we don't do that." So I would either go 250 and 250 or I'd start getting different cards that he, he would allow me to get certain ones. So I started doing that, or going in different places and buying, as I said, I'd go to different Walmarts or different Best Buys, or different Walgreens. I did a lot at Walgreens.

[00:11:50] Bob: When she tries to buy too many gift cards at once, some stores stop her, but she learns how to beat the system.

[00:11:58] Bob: So let me just, just to get a picture of it, so at one point you would go into a Walmart with a credit card, and you would what, get four $250 gift cards? How would that work?

[00:12:08] Henriette Schmuhl: Well, I was, I guess I can't say the nice things, but the fact that at most Walmarts now you don't have to have a, a person. So I was able to go in and get a card, put in my charge card for 200--, $250, get the receipt and walk off. I never had to deal with it. There's no one questioning, so I thought, oh, okay, you know, I can do this. So some stores have charges on both sides, so I went out, then I'd go back in on the other side, and I'd do another $250, and you know get, by myself, and do that. And so I'd go to other, other stores and I mean, I, I, as I said, I have all this knowledge, all this, all this crime knowledge that's like unbelievable.

[00:12:58] Bob: She spends days and days working her way through it seems every retail store nearby.

[00:13:05] Henriette Schmuhl: Well, some of them were Walmart. Um, I went to Jewel even and got cards. I did, I could get Apple at Jewel, I walked into the police station with a stack, 'cause I kept every single one of them so that I, I had everything. I had all of the receipts. And some were Best Buy cards, some were Target cards.

[00:13:27] Bob: So do you have them in front of you right now? I hear you flipping through papers.

[00:13:30] Henriette Schmuhl: No, I have copies.

[00:13:32] Bob: Oh, okay. Well would you mind just, you know, reading off 7 or 8 of them to me?

[00:13:37] Henriette Schmuhl: Okay, here's a gift card that I went to 7-Eleven, of $500 of, it was an Apple gift card that I got from 7-Eleven. I have a, and that was 500. I have a $500 Best Buy card, that was a gift card. And I purchased it at Best Buy. I went to Kohls, to Sephora, and I bought $1000; actually it was four $250 Sephora cards for $1000. I also went to JCPenney’s and got some. Here's another, some more gift cards from Target for $500, because that's where I learned I could get 250 instead of, each, and then I could do it. But if I bought 500, I couldn't. Ross. I mean they, there's a $2000 from initial big ones that were for Nordstrom's Rack. You know, I did another one, I did, 1-2-3-4-5-6 of $300 worth of $50 gift cards I did one time, and then the $2000 which, you know was um, 250 each, and the total $2000 at Nordstrom's Rack. So it was like, Apple, he had me to go the Apple store, to get gift cards where they sold phones. And they wouldn't let me do it. And I said, "Oh I wanted to get gift cards for my grandchildren because their parents were going to get them cell phones and I'm, you know, I'm a grandma, I want to help with the price and stuff. So I said, you know, I wanted to get, you know, a couple thousand dollars in gift cards. And they said, "No, yeah we can't do that." He says, "You can come with them, and you can use your card at the time towards the purchase, or give them you know a, a check or give them $1000 and they can come and use that." But he says, "No, I can't, we don't do gift cards here like that. But if you want to bill cell phones to you, you know, we can do that on the purchase." So they were smart enough to know that this kind of thing was going on, and they wouldn't even authorize it.

[00:15:56] Bob: And after getting the gift cards, she sends them on to her contact at Homeland Security.

[00:16:02] Henriette Schmuhl: So I have this stack of gift cards; that everywhere I went I'd have to get these gift cards, and I'd scratch the thing off, and I'd have to send him a picture of each one and how much that had been spent on them. So we had, I had a stack of those that was tremendous.

[00:16:20] Bob: The whole time Henriette's driven by this fear of getting arrested for drugs and losing all her money to an identity thief, and driven by a desire to protect her family.

[00:16:32] Bob: Yeah, this is all so overwhelming. I'm pic--, just picturing you sitting on the floor of a gas station feeding $100 bills into a bitcoin machine, and that just breaks my heart.

[00:16:40] Henriette Schmuhl: So, you know, I kind of go in there like, you know, everything was fine and stuff, and I'd go out and I would just sit in the car crying. Because this, this is not, I said, "I, I've never cheated, I’ve never stealed, I've never robbed, I've never done anything like this." I said "I've, I've been a good girl. I'm a Christian. I've been good girl all my life, I just turned 75 on Sunday," and I said, "I've never done anything like this." And it was so, so hard me to think that I, I had to do this to save my identity, but you know, I, I just, I didn't want anything to happen to my family. I just, I couldn't see anything happening to them.

[00:17:20] Bob: You were protecting them, yeah.

[00:17:22] Bob: The ordeal goes on and on and doesn't end until well, until the criminals tell her they're going on vacation.

[00:17:31] Henriette Schmuhl: At the end of June, they were working on me finally stopped doing gift cards and getting money, because I kinda ran out, and he said, "Well we're getting you, your new Social Security number now." I said, "Oh, okay." He said, "But it takes a few days." I said, "Alright." So then I, I waited, you know, and he says, "Oh well, they're having some difficulty getting it, so there was this guy," and he gave me the name of the guy, "will call you, and he will ask you probably questions if, you know, if he can't get through." So I waited a few days, then came the end of, end of June and I called, called him, and at first, I couldn't even get, he didn't answer, and he didn't answer my texts, so then I actually called him, and he says, "Oh," he says, "I'm off," because it was the end of the, end of June. He says, "I'm on vacation, and out of the office," but he says, "I'll be back after the 4th of July." And he says, "I'll take care of it, and I'll get in touch with you then." I says, "Okay." So I thought, okay, the, the 5th came, and I thought well if he's just getting back from out on vacation, he's got a lot to do. Well the 5th was a holiday. Then the 6th came, and I texted him, "Where are you?" And I didn't hear from him. The 7th, and then he wasn't contacting me. So then the Friday the 8th, I called. No one answered the phone. Well Friday, the phone had been disconnected. No longer in service. And I called back again, and this was about 4 o'clock that Friday night. And I called back again, I thought, maybe I misdialed. So I called back again, and it, same thing happened.

[00:19:07] Bob: She goes to the police with extensive records of everything that happened, but it's no use. There's no hope of recovering any of the family's money. And in addition to all that theft, Henriette has run up a huge debt just buying gift cards to send to the criminal.

[00:19:25] Bob: You told me that the total was about $250,000.

[00:19:27] Henriette Schmuhl: Right.

[00:19:28] Bob: Wow. How much of that was gift cards do you think?

[00:19:30] Henriette Schmuhl: I think that about 20 to 25.

[00:19:34] Bob: And that debt, well this once retired woman has to go back to work and pay it off.

[00:19:41] Bob: And I understand that you just celebrated your 75th birthday this weekend, is that right?

[00:19:44] Henriette Schmuhl: Yes. Yes.

[00:19:45] Bob: Happy birthday.

[00:19:46] Henriette Schmuhl: Thank you. Thank you.

[00:19:47] Bob: It's been quite a year, huh.

[00:19:48] Henriette Schmuhl: Yes, it has, yes it has. It's just, you know, I just, I just retired last year at 74, and you know we redid, we... recently, we redid the house, so it's like, that was, I said, okay, I can use that excuse because, you know, I know how much it cost to redo that house. But it was like, oh my gosh, you know, I was just getting over that and just try--, putting the house back together, and now this happened, and it's like, oh my, I, it's, it's overwhelming. It's just overwhelming. I am, I'm putting it behind me. I did have to go; I am now working for Kohls. I had, used to work there years ago part-time, and I went back there, and they kept taking me back, and I'm working there about 25 hours a week to help bring some money back into the house to pay the debts, because the bank's helping, but they're not excusing it because I was involved with it. So I have to pay the $20,000 back.

[00:20:52] Bob: Henriette is hardly alone. A woman we'll call “Beth” suffered from a similar gift card fraud attack. This time it was a call from someone claiming to be from the Internal Revenue Service.

[00:21:06] Beth: What happened is, a call came in and they said that I owed money for, for the, from the IRS. And that I needed to immediately call this number, or I was going to be summoned before a judge with the subpoena. So I freaked. I called them, and the guy said, "Ma'am," he was very serious, he was very official sounding, and the phone was IRS, it said, "IRS." It looked all official. So this gentleman said, you know, "You, you owe the IRS." And I said, "Well how much?" And they said, "Well, we'll get to that in a minute, but you have to go before a judge." And I said, "What do you mean I have to go before a judge?" I said, "I pay my taxes, I've paid every estimate payment. I have an accountant," and they said, "It doesn't matter. They have caught you in fraud. You, you have, are frauding the United States government, and you are going to have to go before a judge and address this." And I said, "You're kidding, you're not even telling me how much I owe." And they said, "Well we don't have to tell you anything." And so I'm thinking, oh man, I'm like starting to panic and I said, "Well, isn't there any way out of this?" And they said, "Well, no, you're going to have to go through a judge. You're going, we are, our job is simply to notify you." So what happened is, I said, after the third time, I said, "Isn't there anything I can do to pay this now?" And they guy said, "Well there's possibly a way to do it, but I can't guarantee that."

[00:22:43] Bob: He puts Beth on hold, but then returns with some better news.

[00:22:48] Beth: He said, "It's very iffy, but you, you may be able to pay it, but I can't promise you anything. I'll connect you to this place." So the next guy, he said, "Well, you owe this money, and there isn't any way out of it, but there is one possibility, but most of the time in these cases individuals have to appear before the judge." And I said, "Well can I do anything to pay this now, because really, I don't want to go down that path." And so he said, "Yes, there's a possibility you could pay it through VISA gift cards."

[00:23:24] Bob: Gift cards? Well, going to court sounds like a nightmare, so Beth listens to what the man says and follows his instructions.

[00:23:34] Beth: He was clear we had to go get cash. So I went to the bank, pulled out cash, I can see it as we speak. I got $3000. That time he informed me it's going to be $3000. So I get $3000 out of the bank, and he's on the phone the entire time, and then we go in Publix’s, and they didn't have VISA cards like he wanted or something, there was something with the VISA cards. He goes, "Well, do they have Target cards?" And I said, "Yes." He said, "Well you're going to have to get this many Target cards." So I got whatever the amount was that equaled $3000. So I'm at the counter, and I'm beginning to feel a little weird. I, I don't notice it much, but I'm, they're like looking at me a little odd. You want this many gift cards?

[00:24:21] Bob: She gets the $3000 in gift cards and follows his instructions to go back to the car. But sitting there in her car, something snaps inside of her.

[00:24:31] Beth: "Okay, now what you need to do is give us those numbers on all these cards." So here I am sitting, it's Florida, it's hot, I got the air conditioner on, and I'm relieved to be giving him the numbers, right. And then I kind of got towards the end of the number on one of the cards, and I said, you know, this is a con. I went home and I called my accountant, and she was like, "The IRS never calls you. Get on the phone with Target immediately."

[00:25:02] Bob: Calling Target doesn't help very much.

[00:25:05] Beth: They're very uncooperative. I, it took me forever to get to their fraud division, and then they started acting like I was the person who was doing the fraud. And so I said, "You need to stop this, you need to stop payment on these gift cards." So they were able to stop, I think it was 2300 he got away with, and the remaining amount he did not.

[00:25:30] Bob: So before Target can deactivate the cards, the criminals get away with $2300. And as for the remaining $700, Target says they can't refund the money. So Beth has to keep the Target gift cards.

[00:25:47] Beth: They forced me to use that money to buy a phone. I bought; I ended up buying a phone 'cause I have that same phone right now. So that's what happened.

[00:25:56] Bob: Yeah, so and at the end of all of this, they say, okay, well here's a $700 Target gift card. Wow, that would really stick in my craw.

[00:26:03] Beth: Well, no, they insisted there's no other way around it. I had to shop at Target to, to re--, you know, they wouldn't give me my money back. The other thing I found frustrating is when I called the local police, they didn't do anything. I called the Attorney General, they took documentation, but I think in these kinds of situations, I think the biggest, you know, there's anger, but there's a real aloneness. Hey, isn't anybody going to really understand what happened here? You know, you got your friends, but even my friend was saying, "You did what?" So it was kinda like, okay, so I think there's a real aloneness that you don't have anybody who one, really understands, and two, there's nobody to help you. Nobody helped me.

[00:26:49] Bob: That, that aloneness part, that's terrible.

[00:26:53] Beth: But I think that's what a victim goes through with this.

[00:26:56] Bob: Gail Roberts faced this aloneness too. Fortunately, she was able to stop her criminal even sooner in the process. He didn't get away with any gift card value. But she was left still holding the bag. She says her husband spotted a fraudulent charge from Amazon, but when he tried to call, the number he found online led to an imposter.

[00:27:20] Gail Roberts: Given that we're both retired, Bob, and we are basically on social security, he checks his accounts to make sure the charges are accurate and inline. She's very, very diligent with that regard. So he asks questions of this person, and during the exchange, my husband, several times, checked the number and it seemed to come from Akron, Ohio. So while he pretended to attempt to reverse the charges, this person said he was in trouble and that this representative needed to do the reversal manually. He told my husband he needed to use a Google security feature which required a Google Play card. Once that was obtained, my husband would enter the Google Play number into his PC. The security would then be enabled, and Google would refund the monies. He asked if there was a Walmart, Walgreens, or Target nearby, and then he instructed my husband to go to Target and purchase $400 worth of Google Play cards. He woke me up, he told me not to use the computer, the landline phone, or my cellphone, that he was off to Target to follow instructions from an Amazon representative. He was told to buy gift cards. Now, having had a retail background, I jumped out of bed, threw on some clothes, and attempted to stop him to question him to find out what was going on because gift cards cannot be redeemed other than at that store. That didn’t make sense to me. He was off, I couldn’t catch him.

[00:29:14] Bob: Her husband buys the gift cards, but by then, Gail has talked with the local police who tell her what's really going on.

[00:29:23] Gail Roberts: They said, “Just hang up. It’s a scam.” When he returned to me with the Google Play cards, I said, "We’re going right back to Target," and I got in the car with him, and I said, “We’re returning this.”

[00:29:41] Bob: But Target says the gift cards can't be returned.

[00:29:46] Gail Roberts: I was outraged because it was within the hour of purchasing those gift cards, I wanted not even the money back, I asked Target for a credit so that we could possibly buy tissues or toilet paper, something that we could use other than Google Play cards. And unbeknownst to me, Google Play cards are only good on an Android phone whereas both of us have an iPhone. They absolved themselves of all responsibility, and said there’s nothing we can do, call Google.

[00:30:24] Bob: In calling Google, well, online chatting with Google, that doesn't work either.

[00:30:30] Gail Roberts: In the dialog between the Google liaison for the company, I said, “Well what can an 80-year-old woman purchase?” And she says, “Well books or play games.” And that’s absurd. And I don’t even have an Android phone. I’d have to purchase an Android phone to access what they were selling, which I refused, of course, to do.

[00:30:57] Bob: Since Gail doesn't use an Android phone, she's stuck with $400 worth of, worthless to her, Play Store cards.

[00:31:05] Bob: So all these people said, you know, pointed fingers at each other and said it's not my responsibility, and so the end result was, do you still have $400 worth of useless Google Play cards? Is that what happened?

[00:31:16] Gail Roberts: I have three left now because we had purchased a washing machine, and the service people that brought in the washing machine, I asked if they had an Android phone, and one of the service people said, "Yeah, I have one." I said, "It's your lucky day. Do a good job and I'm going to treat you to a Google Play card." And he said, "Wow, thank you." So I'm made lemonade out of lemons.

[00:31:44] Bob: (laughs) That's a really nice to way to tip somebody who does an important job for you, right?

[00:31:48] Gail Roberts: Indeed it is. This is what I mean about being a light, because okay, we can possibly afford the $400 loss, and indeed, it is a loss, but consequently, I have heard from people that have lost thousands, and I became incensed and that's why I contacted AARP, and I contacted all of the media that I knew about.

[00:32:15] Bob: Gail thinks retailers should do a lot more to help consumers deal with this rash of gift card fraud.

[00:32:22] Gail Roberts: That really does hide the problem, and as far as I’m concerned, but with Google, Target, and any of these institutions that are huge and make millions, if not billions of dollars, should have some kind of orientation program, some kind of human resource education for the people that sell these cards to at least protect the buyer. You know, it doesn’t have to be something where a 20-year-old talking to someone like myself in the latter part of her 70s would say, are you being harassed? Is this a purchase? You don’t want to be interrogated by a service person, but you do want to be protected. So therefore, why can’t we return unused cards? Why can’t we get a credit? If they want to make money, they will still be making money out of that institution. I don’t understand that.

[00:33:29] Bob: Companies should work harder to protect their consumers, Gail thinks.

[00:33:33] Gail Roberts: I would like to say that this is a new world. And, therefore, the old paradigm is dead and now it’s about people and integrity, and caring, having compassion and caring for each other. And who but the company that says, you know, we have your back. If you shop or use our services, we’ll make sure that we have, our company has the integrity, the caring, the compassion to work not only with you, but for you.

[00:34:10] Bob: Well oftentimes they don't seem to have your back. A secret shopper research experience run recently by the University of Minnesota's Marti DeLiema in partnership with AARP, generated amazing results.

[00:34:23] Marti DeLiema: So when we interviewed managers to ask them about their perspective of gift card fraud, they understood the problem, but they also expressed to us their competing priorities. And one of their priorities is to keep the line moving. So to really educate a customer and tell them, you know, I'm concerned about the amount or the quality of gift cards that you're trying to buy, you know, it takes empathy, it takes not being judgmental. They all said you can't just jump right into those questions; you have to warm them up, you have to say, "So how's your day going?" Or you have to ask so, "Wow, that's a lot of gift cards. Who are these for?" All of that takes a lot of time. Trust building takes time. And what they say is that that can create like a longer line building up behind this person who is trying to check out. So you can see that if the store is packed, they're going to choose that priority of keeping the line moving, you know, maximizing profits for the retailer rather than sitting this person, taking this person aside, sitting them down, understanding what's going on in their life, why they were told to buy these gift cards. It's a lot of effort.

[00:35:37] Bob: So what happens when a group of students led by Marti try to buy gift cards under simulated duress just like a victim of a scam? Well that's next week on The Perfect Scam.


[00:35:59] Bob: If you have been targeted by a scam or fraud, you are not alone. Call the AARP Fraud Watch Network Helpline at 877-908-3360. Their trained fraud specialists can provide you with free support and guidance on what to do next. Thank you to our team of scambusters; Executive Producer, Julie Getz; Researcher, Haley Nelson; Associate Producer, Annalea Embree; and of course, our Audio Engineer, Julio Gonzalez. Be sure to find us on Apple Podcasts, Spotify, or wherever you listen to podcasts. For AARP's The Perfect Scam, I'm Bob Sullivan.


Many people see the colorful racks of plastic gift cards in checkout lines as convenient last-minute gifts. But criminals see a tool to steal money from unsuspecting consumers in a way that’s completely untraceable and irreversible. The crime is so common that Americans report the theft of $50 million via gift cards every three months, and many other cases are never reported. In this two-part special report, we meet three people who share their experiences with scams involving gift card payments and find out what researchers have discovered about measures to combat this pervasive form of fraud. 

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