Every couple weeks or so I get a call or email about a store that had fallen victim to a gift card scam. These fraud attempts are inevitable, however prevention is possible! Fraudsters are clever, convincing, intimidating and even threatening. They change their approach and scam type frequently until something works. If only that intellect and energy were used for good.

One of the scams I hear about often is, an employee fields a call from an individual that claims to be someone from Visa, Blackhawk, POS Vendor or even a person of rank within their own organization. The person calling would then claim that they need to test the system for proper data transmission, or some other reason and request to have a certain card or cards activated and be told what the card numbers are so they can verify the codes. Once they get those activated card numbers they can then deplete the card funds for their personal use. It’s important to train staff members that NO ONE not even a government official will call with any such request.

Sometimes it’s not the retailer that’s being victimized, customers fall prey to scams as well. What happens is they’ll get a call from someone saying they are from the IRS, a debt collector or even a police officer. They’ll tell the victim that they have unpaid taxes, debt or that a loved one has been jailed and needs bail. They instruct the person to purchase an amount of gift cards and call them back with the card numbers to clear the issue up. Elderly are the most common targets for this sort of scam.

Some types of fraud actually occur in the store. A purchase using a stolen debit or credit card before the owner cancels is most common. Sometimes the thief purposely damages a payment card or reproduces card numbers on a fake card with a non-working mag stripe forcing the numbers to be manually entered in order to complete the transaction. Other potential in store scams are where the card number and PIN have been revealed and recorded and left displayed so when an unassuming customer actually purchases the cards the thief is able to remove the funds before it’s been properly used by the intended recipient.

There are tons of scams out there, these are just a few and more are created each day. The best protection a retailer has at protecting themselves and unsuspecting victims is knowledge and training. Here are some tips to help prevent gift card fraud.

• Stay current on the different types of fraud.
• Train, train, train staff members, even managers have fallen victim.
• Never activate cards over the phone for any reason; all activations must be in person.
• Make sure the gift card packaging hasn’t been tampered with.
• Do not allow manual entry of payment cards and never accept personal checks.
• Thoroughly check identification and verify against the payment card.
• Maintain a log of the individuals that make large purchases.
• Get management involved on all gift card purchases over $250.
• Be aware of your business and ask questions about non-typical or odd purchases.

If you are a victim or know of someone that is a victim of gift card fraud, alert your local law enforcement and/or the following agencies.

TIGTA (Treasury Inspector General for Tax Administration)
https://www.treasury.gov/tigta
1-800-366-4484

Blackhawk Risk
email: [email protected]
24/7 Blackhawk Risk Hotline: (855) 257-2581

FTC (Federal Trade Commission)
https://www.ftc.gov/