December 08, 2006Gift Card FraudEvan Schuman of Ziff Davis goes thru the urban myths regarding gift cards and how we are told they can be abused, and how they really are. Opinion: As gift cards soar in popularity—some $25 billion in gift cards are expected to be sold this holiday season alone—the attempts to use them fraudulently have also soared. 1 comment posted
Does this mean that gift cards are secure financial tools for retailers and consumers? Not necessarily, but today's gift cards are certainly no less secure than traditional credit cards, with most retailers and issuers willing to be flexible with consumers who have been burned. The most popular gift card fraud rumor hitting Web discussion forums and many newspapers is that there are bands of thieves who copy down gift card numbers out in the open and then wait for a hapless consumer to buy—and thereby activate—the card. The thief then uses the card anywhere he doesn't have to physically present the card, such as online. PointerClick here to read why Evan Schuman says data thieves are one big MasterCard commercial. It may be an interesting story, said gift card fraud expert Paul Cogswell, but it won't work and it likely never did. "It flat out won't work for you," said Cogswell, vice president of loss prevention for CommData, which issues about half the gift cards used in the United States. "This is a recycling of an urban myth. It's rare if ever that you've had a gift card retailer that wouldn't have anticipated this scam."
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