Buy your gift cards from official store websites
Have you ever seen really cheap gift cards that are practically given away? Usually seen on auction sites, crooks have found a way to exploit the loopholes in the gift card system. Although most stores have their own systems, all gift cards operate on a similar scheme.
If you have never heard of a gift card, you might know of gift certificates. Gift certificates are the same as gift cards, except they need not be in the physical form of a card and are not automated for the accounting and checkout processes, whereas gift cards have that feature due to having a magnetic strip. The old version of gift cards were simply called scrip. They all basically serve as some kind of store-specific currency, and can be used to purchase their goods.
Now, the gift cards themselves do not have any value until they’re sold at the issuing store. The approved amount is then entered into a computer database and linked to the specific ID number of the card. Due to the costly nature to regulate and monitor the vast numbers of gift cards, scammers have managed to exploit certain loopholes in the system, aided by the proliferation of websites selling gift cards on the Web.
One method has been labeled e-fencing: Fraudsters who have obtained stolen credit cards use their credit cards to purchase gift cards online, and then immediately try to sell them off real cheap at some website. Some unsuspecting person comes across it, thinks it’s a bargain, and buys it. So the fraudster managed to “redeem” his credit card for some gift cards and (still) make a profit by selling his gift cards; even though the stolen credit card gets canceled later on. Basically, the credit card has been “converted” into gift cards and lives on because the transaction is rarely traced and the gift card canceled!
So, do avoid buying really cheap gift cards, and only buy them from official store websites only. Another red flag is how new the card is; the newer it is (and going for cheap), the greater the chances of it being illegally purchased. So don’t get scammed or be a party to it!
I knew I heard about this somewhere. My friend has been a victim of these things in cyberspace. What I keep telling her is to buy cards herself from a store instead of online. Hackers and fraudulent activities are always lurking somewhere. Be careful with transactions online.
Hey there regarding what you rote about:”Fraudsters who have obtained stolen credit cards use their credit cards to purchase gift cards online, and then immediately try to sell them off real cheap at some website.”
that is sick those guys are so not right cant they figure out better ways to spend there time. Ive been aware of the problem for a wile but never thought they would be finding there way around till today what crooks
I just sold an item that was paid with a supposedly fake gift card. We gotta be a little more careful.
This is terrible. I’m so happy that I read about it and will definitely stick to purchasing the item for the retail price or at a reputable business.
Selah, I agree that you can never be too careful with online transactions; all too often people simply assume a site is legitimate, then find out the hard way that it was not. As for giftcards, I would always rather spend slightly more and be safe in the knowledge that my purchase was genuine, rather than risk buying online at the expense of my financial security. It’s terrible that this sort of crime is not policed more effectively, and until it is I think we will see many more stories like yours.
I’ve just stopped by gift cards all together, with all these scams out there you really never know unless you get it from the actual store. I stick to cash or a real present nowadays.