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Scams with gift cards: How to check your balance and get your money back if it’s zero

Would you ever fantasise about purchasing a lovely gift, such as a cashmere sweater or a diamond necklace, having it gift-wrapped at the store, only to have your special someone open the box and discover it was empty?

Unfortunately, this is all too common during the holidays and other times of the year for those who give out gift cards. It’s yet another way for criminals running elaborate fraud rings to steal money from consumers.

Who would have thought that a gift card you had just received would suddenly have little or no value? How could a gift card be redeemed when it was enclosed in a holiday card or a small gift card tin adorned with bouncy penguins?

According to an AARP survey, approximately 26% of people were surprised to learn that they gave or received a gift card with a zero balance, zip, not a dollar left on it. This is an increase from 21% in a similar survey last year.

How do scammers make use of gift cards?

While most gift cards function normally, some customers are surprised when they go out to dinner or try to buy a new pair of running shoes and their gift card is declined due to a zero balance after crooks mysteriously drained money from the card.

Dina Pfeiffer was overwhelmed by her brother’s generosity this summer when he presented her son Niall with two $200 Visa gift cards for his graduation from Clawson High School.

She decided to go online the next day to review any rules or restrictions. When she noticed the balance on one of the cards, she couldn’t believe it. She roused her sleeping son to inquire whether he had already spent the money on the Visa card. He didn’t.

“There was a dollar left on it – out of the $200 that should have been there,” Pfeiffer explained.

One purchase was made at a supply store, according to the online information for viewing transactions on the Vanilla brand Visa card. “It had been completed in the wee hours of the morning.” She remembered the store not being in Michigan.

Surprisingly, the $200 on the second gift card was sufficient. Her brother’s gift cards for another family member were also returned.

She now advises anyone who receives a gift card to check the balance as soon as possible. Examine what you need to do to register the card – and look for any issues so you can file a complaint as soon as possible.

Gift cards are still popular.

Gift cards continue to be a popular and frequently quick-and-easy gift.

According to the National Retail Federation, total spending on gift cards is expected to reach $28.6 billion in 2022, up from $28.1 billion in 2021. On average, holiday shoppers plan to purchase three to four gift cards and spend around $50 per card.

According to the National Retail Federation, gift cards were among the top gifts purchased from Thanksgiving Day to Cyber Monday, with 27% of those surveyed purchasing them.

Clothing and accessories (purchased by 50% of respondents); toys (31%); books, video games, and other media (24%); food and candy (23%); and electronics (23%).

According to Numerator, a market research firm, approximately 60% of gift shoppers intend to purchase a gift card. Amazon is the most popular gift card, followed by Target, restaurant gift cards, Walmart, and credit-card-style gift cards, such as those with Visa and Mastercard brand logos.

How can I avoid gift card con artists?

The key to using gift cards appears to be to use them as soon as possible – and to act quickly if you run into trouble.

“Once you realise there is no money on it,” Kathy Stokes, AARP’s director of fraud prevention for the Fraud Watch Network, advised.

However, it is not guaranteed that you will be successful in recovering your money. When fraud is discovered, you have a better chance, according to Stokes, if you act quickly and contact the issuer. Much depends on who you speak with at customer service, she says.

When Pfeiffer noticed the issue, she immediately called the customer service number on the card. She described the situation. She was holding a receipt. She mentioned that she is from Michigan and that the purchase was made out of state.

“It took a few months, but they reissued us a $200 gift card,” she explained.

“I honestly thought we were out that money.”

Can I get my money back after falling victim to a gift card scam?


Some of the rules governing fraud are murky. A disclosure from a U.S. Bank Gift Card agreement for a Mastercard gift card states you’d have “zero liability,” but its limitations leave some wiggle room. “In general, you are immune from liability for unauthorised transactions. However, if you do not notify us within 60 days of the date of the first unauthorised transaction, we may refuse to refund any money you lost after the 60-day period if we can prove we could have stopped someone from taking the money if you had informed us sooner.”

According to Matthew Alcuri, vice president of product management for Mastercard North America, the gift cards come with “zero liability protection,” which protects the recipient from unauthorised purchases if the card is lost or stolen after registration.

According to Alcuri, the increasing shift from physical to digital gift cards will reduce the risk of third-party gift fraud.

When there is fraud, he advises consumers to call the customer service number, which is usually printed on the back of the card. A customer service representative can open a claim and conduct an investigation. According to him, money can be put back on the card in some cases if the cardholder previously registered it upon activation.

It matters where you buy gift cards.

Bad actors can use technology to track when compromised cards are activated. Scammers will use the activation code shortly after loading money onto the card.

“Once the card is activated and the PIN is entered, it’s pretty much as good as cash,” said Daniel Ayoub, senior director and analyst at Gartner, a technology research and consulting firm.

According to Ayoub, the criminals can make money in a variety of ways: selling the gift cards online and trading them in for cash value; purchasing expensive goods that can later be resold on the black market; purchasing items for themselves; purchasing goods that are shipped to clients who later sell the item; and some may even trade in the gift cards for cryptocurrency.

“It’s becoming a bigger problem to the point where card companies are taking notice,” he said.

Ayoub went to a store in suburban Detroit where he lives and noticed some gift cards on the rack were more carefully packaged. “It’s not like the card used to hang from a little piece of rubbery glue,” he explained.

Big box stores are encasing the card in more packaging to conceal the important numbers on the back, he said, which could indicate that retailers are attempting to prevent fraud before it occurs.

He isn’t a fan of simply grabbing a gift card from the store’s massive rack. He’d recommend purchasing them online from the retailer or restaurant issuing the card and emailing the e-card to the recipient. You can also purchase a plastic or paper card online. Amazon even sells its own gift cards in a festive holiday box online.

However, even cards purchased online may be subject to fraud.

“But then you have documented proof that you bought it, activated it, and received it,” Ayoub explained.

To be honest, Ayoub prefers to give the old-fashioned way, putting cash in an envelope. “Why should they be limited to one store? Simply give them money “He stated.

Those who have bills to pay ahead of time may appreciate the extra cash.

Ayoub advises against looking up the value of your card anywhere online. Con artists can set up third-party websites to collect your information. If you go online to check the balance of a gift card, make sure you’re at a retailer or banking site listed on the gift card itself, not something you find online.

Consumer watchdogs warn that crooks have been known to set up phoney websites that advertise heavily discounted gift cards – but the crooks steal your financial information and possibly your money. The gift card is not delivered to you.

Other gift card suggestions
Gift cards are typically difficult to exchange if the recipient is unable to use them. “Card is not redeemable for cash and cannot be used at ATMs,” the back of a $25 Mastercard gift card with a $3.95 activation fee says.
Gift cards given as part of a promotion may have different rules, so read the fine print.
Consider the possibility that a store or restaurant in your town will close or go out of business.
Give your card credentials to anyone who requests them.
Keep receipts for purchases made with the gift card whenever possible.

Of course, a gift card can be declined even when there is no fraud. Perhaps the card was not properly activated when purchased. Perhaps the person who gave you the card made a mistake and gave you a card that they had already used. It is possible.

I once encountered a problem when we purchased gift cards that were not compromised and a store clerk had some difficulty running the card. She claimed the card had not been activated when it had been. The problem was resolved by the store manager.

In some cases, the card, which may still have money on it, may be declined at the register if the dollar value being charged against the card exceeds the amount placed on the card.

In advance of making a purchase, inform a store clerk that you intend to use a gift card and explain how much money is on the card. If you have to use a gift card and then add money to cover the purchase, some clerks are familiar with how to use a Mastercard or Visa gift card to make the transaction go smoothly.

Shelley Hunter, also known as the Gift Card Girlfriend and the owner of Giftcards.com, claims that if a gift card purchase fails, it isn’t always the result of fraud.

“For fraud prevention, stores are increasingly implementing security delays on some gift card activations,” she said. “So speaking with customer service should assist in determining whether or not a scam is involved.”

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