ECONOMY & WORK
MONEY 101
NEWS
PERSONAL FINANCE
NET WORTH
About Us Contact Us Privacy Policy Terms of Use DMCA Opt-out of personalized ads
© Copyright 2023 Market Realist. Market Realist is a registered trademark. All Rights Reserved. People may receive compensation for some links to products and services on this website. Offers may be subject to change without notice.
MARKETREALIST.COM / NEWS

As Gift Card Fraud Plagues Holiday Shoppers; Here are Ways to Steer Clear of Such Scams

The $500 gift card, initially intended for a friend, ended up being kept by Miller himself after the friend declined it
PUBLISHED DEC 30, 2023
Cover Image Source: Pexels
Cover Image Source: Pexels

As the festive season kicks off, a cautionary tale from Montreal serves as a stark reminder for shoppers to exercise vigilance when purchasing gift cards, particularly from third-party retailers. A Montreal resident recently experienced a disconcerting incident involving a Home Depot gift card purchased from a Super C grocery store. The $500 gift card, initially intended for a friend, ended up being kept by Miller himself after the friend declined it. However, when Miller attempted to use the card a few weeks later, he discovered that the $210.58 balance had mysteriously vanished.

The perplexing aspect of this case lies in the fact that the protective scratch-off strip, concealing the card's PIN and password, appeared to be untouched.

Image Source:
Image Source: Pexels

Gift card fraud is a pervasive issue across North America, costing consumers millions of dollars annually. Claudiu Popa, a privacy and cybersecurity consultant, sheds light on the complex ecosystem of gift card distribution. Major retailers often utilize third-party companies to disseminate their cards to various locations, making the security of these cards challenging to control. The vulnerability of gift cards to tampering, coupled with the lack of transparency in transaction details, leaves consumers exposed to potential fraud.

One significant challenge faced by victims of gift card fraud is the difficulty in proving ownership and establishing responsibility when an issue arises. A Toronto-based cybersecurity analyst, emphasizes the absence of clear guidelines on who should take responsibility, whether it's the credit card company, the vendor, the third party, or the individual selling the gift card.

Homeland security Pexels | By Pixabay
Homeland security Pexels | By Pixabay

To address these challenges, experts like Popa propose enhanced legislation in Canada to provide better protection for consumers. While existing federal laws prevent gift cards from expiring and mandate disclosure of associated fees, there is currently no protection against fraud or unauthorized charges. Drawing inspiration from efforts in the United States to include gift cards under the Electronic Fund Transfer Act, experts suggest classifying gift cards in the same category as debit cards. This classification would incentivize distributors and retailers to implement additional security measures, such as chips, which can minimize the risk of tampering.

In Miller's case, after weeks of pursuing answers, Home Depot eventually agreed to reissue a gift card for the remaining balance as a "one-time good faith gesture." But Miller believes that such incidents could be avoided if companies took measures to secure gift cards in the first place, and suggests that cards should be stored securely behind the counter, from where consumers should purchase directly from the retailer.

Image Source: Pexels/ Rachel Claire
Image Source: Pexels/ Rachel Claire

For consumers looking to protect themselves, Popa recommends buying directly from recognized brands, activating the card immediately, and checking the balance regularly. He also suggests opting for digital gift cards when possible, as they offer comprehensive tracking and transaction details, including timestamps. By printing out a screen grab or PDF of the digital gift card and keeping receipts, consumers can have tangible evidence in case of any dispute.

MORE ON MARKET REALIST
Robert Herjavec and Lori Greiner rubbed it in O'Leary's face by celebrating their deal with Phoozy
17 hours ago
Duc and Lisa Nguyen's stubbornness paid off, as the co-founders of Baubles + Soles got Daymond John as a partner.
19 hours ago
The player got the host to be candid about his fears and his mother's opinion on him.
21 hours ago
Justin Baer, founder of Collars & Co., was looking for mentorship from the Sharks in addition to a $300,000 investment.
22 hours ago
She said that her husband may still have to buy a dog as America may hold him accountable.
1 day ago
When Harrison knew that the 18th-century map was the real deal, he made a genuine offer.
1 day ago
10 years after her sister’s win, Chelsea Hall hit the jackpot on ‘WoF’ with a brand new Mini Cooper and a cash prize.
1 day ago
The co-founders of BuggyBeds wowed the Sharks so much, they were "itching" to invest, and offered a $250k deal.
1 day ago
The guests were left stunned to find out just how much the repairs would cost.
2 days ago
Unfortunately for the seller, she allegedly got robbed of a significant amount of money.
2 days ago
Not only did the co-creators of FlingGolf get a $300,000 deal, they proved Mr Wonderful wrong.
2 days ago
The guest never imagined the old, autographed sneakers that his mom acquired could be worth so much.
3 days ago
The gameshow whiz did it again by bagging the top prize on yet another trivia test.
3 days ago
Riccardi took to Reddit to clear the air around his stunning loss which was facing scrutiny.
3 days ago
Fans gathered on the show's unofficial Reddit forum to discuss the 'dumb and useless' items.
4 days ago
The contestant, Matt Benton expressed he wanted to enjoy the moment before thinking of the future.
4 days ago
The guest who treasured the collection had no idea how significant it was.
4 days ago
Even the contestant admitted that there was no way he could've got the answer.
4 days ago
Jennings told TV Insider that Seacrest is a generational talent and there's nothing he couldn't do.
5 days ago
The co-founders of 'Bro Glo' managed to bag the biggest Shark for their innovative self-tanner.
5 days ago