As we head into the holiday shopping season this fall, there's no bigger waste of your money than purchasing a gift card that's worth nothing at all.
Unfortunately, buying an already-drained or worthless gift card is more common than you think.
Bill Sampson is well aware of that.
He has a stack of unused gift cards in his kitchen. He recently bought another while grocery shopping.
"I got a Home Depot card off the rack," he said, "all wrapped up in cardboard."
But when he got home, he says, "I opened the package, and voila, it was an Amazon gift card."
Someone had swapped the $100 Home Depot card he wanted with a worthless Amazon card.
"So someone apparently is pulling these off the shelf," he said "slitting the package, and putting a dummy Amazon card in that hasn't been activated."
The Amazon card had no value. The Home Depot card he paid $100 for was now in someone else's hands.
"There was no sign of tampering," he said. "No sign."
More and more shoppers end up with worthless cards
One recent AARP survey found 73 million Americans have experienced gift card fraud.
Nearly a quarter said they have given or received gift cards with no funds on them.
Veteran consumer advocate Herb Weisbaum, now a contributing editor of Checkbook.org, has a stark warning to consumers.
"I don't buy cards retail anymore because I am aware of the risk," Weisbaum said.
Weisbaum says you can look for signs of tampering such as extra glue, or scratched-off numbers.
But in recent cases, as with the card Bill Sampson bought, he says you may not see any obvious signs, as scammers hide their tracks.
"It's a situation where they get one of the real cards in the rack," Weisbaum said, "and then they can run algorithms to figure out possibly the other cards that are in that stack. So, they don't even have to tamper with the cards anymore."
Weisbaum recommends:
- Purchasing electronic gift cards.
- In a store, only buying store gift cards kept behind a counter, where they can't be swapped.
- Using gift cards as soon as possible.
Luckily, Bill Sampson still had his receipt and was able to get a refund.
"If I had put it in my stash of cards, and not used it for a year, I would have really been out the money. It would have been my loss," Sampson said.
Some grocery stores now taking action
Kroger, the nation's largest grocery chain, says it has recently moved gift cards behind the customer service counter at stores with high levels of complaints.
"Kroger employs multiple strategies to reduce fraud in our stores including, but not limited to, associate training on fraud awareness, physical placement of gift card displays near registers at front of store for maximum visibility, additional signage and digital resources to educate consumers to avoid common fraud, and video surveillance, We continue seeking ways to leverage technology and training to improve fraud prevention," Kroger spokeswoman Jen Moore said in a statement.
Meanwhile, the Federal Trade Commission reminds shoppers that gift cards are for gifts, not for payments.
The agency says "never buy a gift card because someone tells you to buy one and give them the numbers."
Any caller, even if they claim to be from the IRS, a sheriff's department, or a company like Microsoft, is trying to scam you if they ask you to buy gift cards.
So be extra careful this upcoming holiday season, so you don't waste your money.
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