A few tips for the safe use of gift cards

My daughter participated in a Christmas gift exchange in her young adult usher ministry. Every teen but my daughter brought gift cards. She came with a movie to exchange. Her gift was not so popular.

My, how times have changed. Forget the crazy colored scarves or the overly bold-smelling lotion gift packs. The gift card is the go-to present when you don’t know what to get someone. My husband and I laughed that the teens could have put all the cards in a bowl and then selected the one they each wanted.

There are many people who may still view a gift card as thoughtless, a sign that you gave up trying to find a proper present. But in this day, when people have purchased for themselves just about everything they want, a gift card can be very thoughtful and much desired. At least you can be reasonably sure the recipients get something they want or need.

This season, holiday shoppers are expected to spend an average of $155.43 on gift cards, the highest amount since 2007, according to the National Retail Federation’s 2011 Holiday Consumer Intentions and Actions survey. Total spending on gift cards will reach $27.8 billion.

But as you shop for cards, especially those of you with holiday shopping still left to do (that’s me), be aware of some things you can do to keep from being scammed. For example, have you ever heard of gift-card cloning? In this high-tech scheme, thieves steal inactivated gift cards from store shelves and reproduce the card information often using a magnetic card reader, much like the devices used to duplicate a stolen credit card. The cards are then returned to the shelves while the thieves wait for people to buy and activate them.

The crooks then frequently call the toll free numbers on the back of the cards or go online to see when the cards become activated. Once this happens, the money placed on the gift cards is immediately spent, leaving the purchaser or recipient empty-handed.

Joseph LaRocca, senior asset protection adviser with National Retail Federation, offers these tips to protect yourself and the person receiving the gift card:

•Buy from a reputable source. “Don’t buy cards from some random site you find online,” LaRocca told me.

Look carefully at the gift card before you purchase it. Don’t buy a card if it looks like it has been tampered with. For example, many cards now have a PIN or personal identification number that is unique to that card and is located on the back under a silver scratch-off area. If that area has already been scratched, don’t buy the card. In fact, you should give the card to store management, LaRocca said.

Check your receipt to make sure your gift card has been activated. I watch as a lot of shoppers immediately stuff their receipts in their wallets without examining them. It’s possible for a dishonest cashier to hand you an inactivated card and pocket the card you put money on.

Make sure your receipt matches the gift card that you purchased.

Save your gift card receipt. “There are any number of reasons why the card may not have been properly activated,” LaRocca said.

Give the gift-card recipient the receipt (you may want to make a copy of it for your records). Having the sales receipt will help to verify the card was purchased in case it’s lost or stolen.

Also keep in mind that the Credit Card Accountability, Responsibility and Disclosure Act of 2009 (also known as the Credit CARD Act) provided some extra protections for gift cards. If you don’t use the gift card right away, at least the money on your card will be good for up to five years from the date the card was purchased. Any money that might be added to a gift card at a later date must also be good for at least five years. Under the new law, only one fee per month can be charged and dormancy fees can only be assessed if you haven’t used your card in a year. To read more about rules for gift cards, go to www.federalreserve.gov. Search for “New Rules for Gift Cards.”

LaRocca said the retail industry has been working with law enforcement to increase security measures to prevent gift-card cloning. “There are sophisticated ways we are trying to prevent fraud,” he said. “But we are always playing cat and mouse. Criminals are constantly evolving their scams.”

One thing I’m going to put in practice if I get a gift card for Christmas: I’m going to use it as soon as possible.

Washington Post Writers Group

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