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!Share This: