How to protect yourself from gift card scams this holiday season

An Alberta couple is warning others about a new gift card scam after losing $200.

Stephen and Tia Hagen say they bought a prepaid Visa card for their daughter, and it scanned normally when they purchased it.

But when they got home and tried to check the balance online, they discovered it was fraudulent.

“Of course, it said it couldn’t find the number and this number isn’t valid,” Tia recently told Global News.

READ MORE: New twist on prepaid gift card scam costs Alberta couple $200

She was shocked, especially because she says the card was in official packaging and it didn’t look like it had been tampered with.

“It looks very legitimate,” she said.

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Tia took the card to a local retailer to try to use it. Not only was the card unusable, but it had also started to peel apart.

“I think it’s just a piece of cardboard that maybe they laminated,” she said.

Tia Hagen says the fraudulent gift card she purchased peeled apart once it had been opened.

Tia Hagen says the fraudulent gift card she purchased peeled apart once it had been opened.

Unfortunately, according to money expert Barry Choi, the Hagens’ experience is increasingly common.

“There are always new scams with [gift cards],” Choi told Global News. “Now, it sounds like it’s the barcode [scammers] are tampering with.”

In doing some research, Choi says he found it’s the new standard for scammers to replace barcodes with fraudulent stickers. Unfortunately, this can be very tough to spot for the average consumer.











Protecting yourself from gift card fraud and scams


Protecting yourself from gift card fraud and scams

The only way to absolutely protect yourself from losing money is to avoid gift cards altogether, Choi said.

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“With so many scams going on, is it really a bad thing to put [some money] in a Christmas card? Why not just give them cash?” he said.

However, if you’re adamant about giving gift cards this holiday season, there are some ways to protect yourself.

Buy directly from the retailer

It’s super convenient to grab a gift card while you’re doing your groceries or getting gas, but Choi warns against it.

“If you’re going to buy a gift card from a coffee shop or big box store, go to the actual store, where gift cards are usually right at the counter and where they’re loading it on the spot,” he said.

This will cut out the middle man, decreasing the chances that the card you buy has been tampered with.

“To me, that’s the safest way,” he said.

READ MORE: Don’t fall for these ‘money-saving’ schemes targeting holiday shoppers

Be wary of ‘deeply discounted’ gift cards

If a card is “deeply discounted,” you should question how valid it is.

“It’s different if you’re buying from a store like Costco — that’s legit — but if you’re looking at Kijiji online and someone says they’re offering 20 per cent off gift cards, I would pause a second,” said Choi.

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“There’s a good chance that most of them are legit, but how are you going to verify that?”











Investors say they lost life savings after company went into receivership


Investors say they lost life savings after company went into receivership

To convince consumers, a scammer may offer to call and check the balance in front of you — but that situation can easily be manipulated.

“That sounds good in theory, but … once you confirm the balance, [someone] can have the number stored and they can make an online purchase immediately through a third person,” Choi said.

If you receive a gift card and want to swap it for something else, only use legitimate, verified websites like cardswap.ca.

If you receive a gift card, use it as soon as possible

“Check the balance right away … and spend that gift card as soon as you possibly can,” said Choi.

That way, you won’t forget about it or lose it. It also lessens your chances of the barcode being stolen or the credit being lost by the company, he says.

“How often do we hear about companies losing their data and then [people] losing their money?” he said.

— With files from Tomasia DaSilva and the Associated Press

 

Meghan.Collie@globalnews.ca

© 2019 Global News, a division of Corus Entertainment Inc.

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