Security guard learns about gift card fraud the hard way
LAKELAND FL December 31 2018 — Julian Cox works as a security guard, but he had no defense for the growing problem of gift card scamming.
The Lakeland man recently purchased $1,100 in Amazon gift cards at three area retail outlets. They were meant to be Christmas gifts for his children and grandchildren.
As a precaution, he checked the balance on each card before presenting them as presents. He said he was shocked to learn that each card had a zero balance.
“It’s ruined me from getting (more) gift cards,” said Cox, 67. “You don’t know what you’re getting.”
Cox is not alone in his frustration. The practice of gift card draining is a growing concern for consumers and retailers alike, with consumers spending approximately $130 billion annually on gift cards, according to the financial services firm CEB TowerGroup.
A recent collaboration between the Chicago Sun-Times and AARP revealed how the popularity of gift cards has attracted numerous scams to deplete the cards’ value before consumers get the chance to use them.
In one example, fraudsters remove the cards from store displays and use a skimmer to read the magnetic strip, or they copy the card number.
For cards with scratch-off codes that require activation, some scammers buy replacement stickers after scratching off the PIN.
A spokeswoman for the Retail Gift Card Association told the newspaper that the industry is investing in technology to flag suspicious activity on physical and digital gift cards. Ideas include offering randomized PIN codes, using CAPTCHA software during purchase and registration and providing more secure packaging for physical gift cards.
Cox, whose wife died in February, said he spent hours on the phone attempting to recoup his $1,100 loss. The lesson he learned is that, ultimately, it’s a buyer beware situation when purchasing gift cards.
Cox did recover the $300 in gift cards he purchased at a Harvey’s Supermarket. Joe Caldwell, a spokesman for Harvey’s parent, Southeastern Grocers, said the company was able to verify Cox’s purchase and refunded him with cash.
Still, the incident left Cox with a bad taste for gift cards.
“Something needs to change,” he said. “Either change the packaging or put the cards behind the counter ( to prevent tampering).”
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