[font style="font-family: Verdana;" size="2"]Some good tips at the bottom....
[/font][hr style="width: 100%; height: 2px;"]Beware of fraud in holiday gift cards
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NICHOLE MONROE BELL
[email protected][/font]
If you're planning to buy a gift card for a friend or loved one this holiday season, beware. The cards are more popular than ever among shoppers eager to give a gift that is flexible but more personal than cash. But increasingly, criminals are stealing blank cards and selling them online or tampering with them on the rack, leaving innocent -- and often embarrassed -- gift recipients at the checkout with worthless plastic.[/p] The scams are a new form of fraud that has become a growing concern of retailers and shoppers as more department stores, restaurants and supermarkets offer gift cards as a way to increase sales, bring in first-time shoppers and build brand loyalty. Gift card sales make up about 4 percent of the $435 billion in holiday spending nationally, according to the National Retail Federation. More than two-thirds of the consumers the group surveyed said they planned to purchase at least one gift card for the holidays, making up about 16 percent of the average consumer's holiday gift budget.[/p] And because the cards are so widely available, to thieves they can be as good as cash.[/p] Some thieves steal cards directly from the stores and sell them online below face value to buyers who think they're getting a bargain. Other crooks buy gift cards using stolen credit cards or counterfeit checks as a way of shifting to a less traceable form of payment.[/p] Another scam works with packages that have a bar code printed on the card and the package. The thief takes the card out of its package and pockets it while putting a mismatched card in its place. The thief then waits for a customer to buy the package that has been tampered with. The store activates the number on the package, validating the card in the thief's pocket. By the time the customer realizes he or she has an invalid card, the stolen card has already been used.[/p] Monroe resident Ashley Burgess, 23, knows what it's like to be stuck with a bogus card.[/p] When Burgess tried last December to buy a surround-sound system with a $250 Best Buy gift card her employer had given her as a bonus, she was shocked to learn the card had a zero balance.[/p] She left the store empty-handed while the retailer launched an investigation.[/p] Burgess said Best Buy officials later told her they discovered that a cashier had pocketed the valid card when it was purchased and redeemed it 10 minutes later. The cashier, who was later fired, had replaced the valid card with a blank one during the transaction at the register.[/p] "The whole situation was very frustrating," said Burgess, who eventually received a valid card and returned to buy the sound system.[/p] Experts say gift card fraud is part of a larger problem of organized shoplifting with which retailers across the country are struggling. Groups of criminals coordinate their efforts to steal items such as baby formula and pharmaceuticals that can easily be sold on the black market.[/p] The problem is so new, however, that it is difficult to quantify because many retailers are just beginning to specifically track gift-card-related losses, said Richard Hollinger, a criminology professor at the University of Florida. Hollinger's department produces the annual National Retail Security Survey, considered the premier report on retail loss and prevention.[/p] Recognizing a growing problem, the retail security survey began asking about gift cards for the first time last year.[/p] About half of the 156 retail chains participating in the survey said they tracked gift card losses in 2005. Those who responded estimated they lose about $124,000 a year on the cards.[/p] The retailers estimated that 62 percent of gift card losses were attributable to dishonest employees, while 26 percent could be blamed on counterfeit or stolen cards, according to the survey. (The remainder of the losses came from other causes.)[/p] Hollinger said the problem is likely larger than the dollar figures suggest.[/p] "A lot of retailers just simply could not quantify it," he said. "This is a problem, but it's a new area and many retailers lump gift card losses in with other types of losses."[/p] Many stores, wary of tipping off thieves, are reluctant to discuss how they are countering the problem.[/p] When it comes to gift cards, many have increased their monitoring of card sales, while others have improved the packaging to make tampering more difficult.[/p] Mooresville-based Lowe's and competitor The Home Depot said they steer clear of discussing ways they're dealing with theft.[/p] Officials with Food Lion, based in Salisbury, said they are working with state and national lawmakers to toughen the penalties for fraud. The crimes are typically misdemeanors. The grocery store chain is also working with other retailers to put pressure on Internet sites where thieves are selling the cards.[/p] Many of the sites argue that the theft isn't their problem and that they "can't control what people do," said Daniel Butler, vice president of merchandising and retail operations for the National Retail Federation.[/p] That doesn't fly with retailers. They discourage consumers from buying gift cards from online sites.[/p] "We see them as just as guilty as someone who sells these out of the back of their car," Butler said.[/p] Meanwhile, consumers who have been burned by bad cards are taking steps to protect themselves and the people who are the recipients of their gifts.[/p] Charlotte resident Tony Hoppa, 44, said he took his family to a local restaurant several months ago and tried to use a gift card that a business associate had given him. The waiter returned and told him the card had no value. Hoppa ended up paying for the meal himself.[/p] "If I didn't have a credit card with me, I don't know what I would have done," Hoppa said. "Now, if I give someone a gift card, I give the person a receipt showing how much it's been loaded for. It may be tacky, but it's safer that way."[/p]
[span class="subhead"]Protecting Against Fraud[/span][/p]
Retail experts say there are several steps consumers can take to guard against ending up with a fraudulent gift card. [/p] [span class="bullet"]• [/span]
Buy from reputable sources, preferably directly from the store. Many experts discourage buying gift cards online because it's difficult to know whether the card is stolen or will arrive with the promised amount.[/p] [p style="font-weight: bold;"][span class="bullet"]• [/span]When buying a gift card, keep the original purchase receipt with the card as proof of purchase.[/p] [p style="font-weight: bold;"][span class="bullet"]• [/span]Immediately after buying a gift card, ask the cashier to scan the card itself to ensure the card is valid and has the proper value.[/p] [p style="font-weight: bold;"][span class="bullet"]• [/span]Reputable companies do not ask for sensitive information such as Social Security number, bank account information or date of birth when purchasing gift cards.[/p] [a href="vny!://www.charlotte.com/mld/charlotte/business/15820525.htm"]vny!://www.charlotte.com/mld/charlotte/business/15820525.htm[/a]
