Worthless Gift Cards

"Watch Out for Worthless Gift Cards."
Americans love giving and receiving gift cards: Sales are projected to reach $308 billion in 2024, according to Javelin Strategy & Research, a company that tracks the industry, up from $124 billion 10 years ago.

Unfortunately, soaring sales are accompanied by gift card theft, an easy heist that carries little risk of getting caught. Stealing money from gift cards has become so lucrative that foreign fraudsters are now involved. U.S. law enforcement is focusing on criminal gangs in China that are targeting the U.S. gift card market (more on that later).

The most common way thieves drain money from gift cards is by shoplifting them from supermarkets and other retailers and then manipulating the package to steal the card information. The compromised cards are then placed back in stores, and the stolen information is added to a computer program that tracks the cards to see when they are activated.

“The minute you load money onto one of those cards, the crooks are notified, and they instantly drain it, sometimes even before you leave the store,” said Amy Nofziger, director of fraud victim support at the AARP Fraud Watch Network. “Unfortunately, the theft may not be discovered for weeks or even months after the purchase, when the recipient uses the card and it’s worthless.”

Formerly an occasional nuisance, gift card draining is now a common crime. A 2022 AARP Fraud Watch Network survey found that a quarter (23 percent) of American consumers have given or received gift cards that had no funds on them. The average loss was $140.

But no one really knows how much money is drained from gift cards each year. The National Association of Retailers doesn’t track these losses, and FBI data does not have a separate category for this crime.

READ more at: https://www.checkbook.org/delaware-valley-area/consumers-notebook/articles/Watch-Out-for-Worthless-Gift-Cards-7884