Avoid gift card fraud this holiday season | Better Business Bureau

Gift cards may be the most popular and convenient holiday gift, but Better Business Bureau serving Alaska, Oregon and Western Washington warns of bogus cards and security flaws.

According to the National Retail Federation, holiday shoppers spent more than $31billion in gift cards in 2014 making the popular item the number one gift eight years in a row. And while gift cards may be the gift-giving solution this holiday, BBB receives hundreds of inquiries and complaints each year about bogus cards and the fraudulent sites that sell them.

Unlike credit and debit cards, most gift cards don’t require proof of ownership by way of photo ID, signature or pin. Little personal information is required to purchase or utilize a gift card, making them alluring to scammers who can obtain them in bulk and resell them online.

Better Business Bureau reminders shoppers to watch for the following red flags:

  • Online auctions. Be careful buying gift cards from online auctions because it is impossible to tell if the card is legitimate or even has a balance. Cons can easily tamper with the card and then sell it online.
  • It’s Free. Offers for free gift cards are a way scammers can collect consumers’ personal information to commit fraud.
  • It’s The Only Payment Accepted. There is little difference between purchasing an item with a gift card and wiring money. Just like cash, once the funds are in the hands of the seller, retrieving them is nearly impossible.
  • The Silver Strip. This strip on the back of the card protects the card’s security code. A scammer can retrieve the gift card number and its security code prior to it being purchased by removing this strip. A monitoring system alerts the scammer when funds are applied, and the card has been activated. The card is now ready for a scammer’s personal use.

Before making holiday gift card purchases, BBB suggests consumers consider these important tips:

  • Purchase directly. Protect finances and personal information by purchasing gift cards straight from the retailer. Discounts are enticing, but nothing is gained when a card is worthless.
  • Verify the card. When shopping in person, have an employee verify the card balance before exiting the store. Don’t ever use a gift card that has clearly been tampered with. Check that numbers and security strips are intact.
  • Save the receipt. When buying a gift card, keep the receipt for proof of purchase.

Visit bbb.org for business information and visit Scam Tracker to learn about scams in your area or provide information about a scam.