Three Gift Card Warnings and a Solution

Warning #1: Gift Card Warning: Check Retailer's Health

From The Federal Information Center and NPR.org

Two-thirds of shoppers plan to give gift cards this holiday season, making those little plastic cards the second most popular gift after clothes. But some experts warn that these gifts could be worthless if the current trend of retail bankruptcies continues. Read more…

Warning #2: Crooks jotting down Gift Card numbers of Gift Cards on Display – the reality…

As "newsworthy" as the stolen gift card number scams might have become, the National Retail Foundation put out this press release in 2006 addressing the issue and pointing out gift card scams much more prevalent than this one:

NRF Addresses New Gift Card Scam

Washington, DC, December 4, 2006�Reports about a new gift card scam detailing how consumers could lose money from gift cards if criminals steal the card numbers from the back of the card are accurate but somewhat misleading, according to the National Retail Federation.

The retail industry has implemented sophisticated safeguards to prevent thieves from obtaining, and using, consumers gift cards, said Joseph LaRocca, NRF Vice President of Loss Prevention. Most gift cards are outfitted with scratch-off security codes and protective packaging, in addition to a special verification number distinguishing one gift card from another. Also, retailers have created complex back-end systems to prevent criminals from obtaining proprietary gift card information.

Instances where consumers lose money from theft of gift card information are extremely rare, but they can happen,� said LaRocca. Holiday shoppers are encouraged to keep the original receipt from the purchase of gift cards in the unlikely event that they need to return a card to a retail store because it has been used. Retailers can then check gift card purchases to verify that the card was fraudulently used and in most cases can refund the gift card value to the customer.

Other recommendations for keeping your gift cards safe this season are:

• Make sure to double check the section on the back of the card where the personal identification information is before you purchase it. If it appears to already be scratched off, take it to a customer service representative
• Only purchase gift cards from reputable sources and not online auction sites where they are likely to be counterfeit or were fraudulently obtained.

NRF estimates that gift card sales will total $24.81 billion this (2006) holiday season, up from $18.48 billion last year.

The National Retail Federation is the world's largest retail trade association, with membership that comprises all retail formats and channels of distribution including department, specialty, discount, catalog, Internet, independent stores, chain restaurants, drug stores and grocery stores as well as the industry's key trading partners of retail goods and services. NRF represents an industry with more than 1.6 million U.S. retail establishments, more than 24 million employees – about one in five American workers – and 2005 sales of $4.4 trillion. As the industry umbrella group, NRF also represents more than 100 state, national and international retail associations. www.nrf.com.

Warning #3: Discussion about problems with various types of gift card security measures.

I'd have to look into this further to see what new security measures are actually in place for gift cards, but this was an interesting discussion about problems with various types of gift card security measure:

Schneier on Security: Gift Card Hacks

Solution: Clark's No-Gift-Card Certificate!

Use the penny-pincher’s no-gift-card certificate!