Gift Card Warning!!

By Andrew Ehinger

Don't get me wrong, I love gift cards. They're not impersonal. They're not thoughtless. In my mind they could be the perfect gift. However, with any purchase you make there are things you need to know.

A few years ago when gift cards really began to be the "in" gift, companies started to put restrictions on their use, fees for non-use, and even fees for checking the balance. After public outcry and legislation, some cards eliminated the fees. In New York gift cards must not charge a fee for the first year. After that any fee schedules must be posted clearly.
    Bottom line: Some cards hold their value forever. Others, over time, will diminish as inactivity fees eat away at the cards' balance. So read the fine print carefully and use those gift cards in a timely fashion.

FRAUD!

Believe it or not there are some crooks out there who want to steal your gift card's value before you even use it! How do they do it? Well, even though card companies have tried to add security features, if you don't know what they are, you may become a victim.

All Gift Cards have zero value until the store adds the money or a pre-valued one is activated at the register. Since the cards are treated like cash, unless you lose them they're pretty safe. However, Gift Cards can also be used sometimes for on-line purchases and that's where a crook can score.

Here's how it works... A crook goes to a gift card kiosk, writes down some card numbers, and puts them back on the pegs. Then he goes home and makes a purchase on the card's web store using the gift card number. Since it hasn't been activated yet, the card comes back invalid and the purchase fails. But over time the crook will continue to check to see if the card number has been activated. So if you happen to pick up the card the crook took the number from and activate it, the crook could make a purchase before you even give it to a loved one.

So, how have cards tried to stop this? You may notice on the back of some cards a silver scratch off box. Under this box is a PIN number. Many gift cards now a days have this secret PIN number to insure that only the gift card recipient uses the value of the card on-line. If you buy a card, inspect it to make sure that the PIN number is still concealed. If not, a crook may have already scratched it off, recorded that number and could potentially steal the value just like before.

Now, as I mentioned, not all gift cards have this PIN, but that does not mean you should feel unsure about buying that gift card. Some cards, like the American Express Gift Card, come in sealed envelopes.  Others are glued to cardboard or have tamper resistant seals. So, when you buy a gift card - before it's validated - make sure the PIN has not been scratched off or the card been tampered with.

Have a happy and safe holiday!