Tennessee is considering a bill that would allow consumers cash back for gift cards worth $10 or less. (story) Sadly, no talk of including open-loop cards.
Some people like open-loop (Visa) gift cards because it affords them some privacy; the gift card is anonymous in that it is not associated with your name. Even if you are not a criminal, it can be disturbing to think how much information is collected about all of your spending habits, such as when you use normal credit cards. Thanks to the Gramm-Leach-Bliley Financial Services Modernization Act of 1999, this information is often sold in some form by financial institutions if you fail to properly opt-out (and even sometimes if you do properly opt-out).
It is true, as this article explains, that gift cards can be tracked just like credit cards. Authorities can obtain records that show where the gift cards were used and for what. But unless you use them in some way that associates the cards to you, such as purchasing something online which is then shipped to your name and address, purchases are still anonymous.
In this story, a Boston police officer suggests an easy way to spot gift cards that have been reassigned with stolen credit card numbers; compare the numbers on the card to the last four digits on the receipt. If they don’t match, it is a fake.
Texas is considing a law that would ban gift card expiration dates. (article)
Scratch that (see post below). One theory is that hackers are merely purchasing iTunes gift cards with stolen credit cards and reselling them.
In a major blow to Apple, Chinese hackers have cracked the iTunes gift card algorithm and are selling iTunes gift cards for pennies on the dollar. (article)
You can now be the proud owner of a Capcom Street Fighter sponsored Visa debit card that sets a new low in the fees it charges, including:
* $9.95 activation fee
* $4.95 monthly fee
* $0.25 per debit use
* $1.50 per ATM withdrawal (not including whatever fee the ATM charges)
* $10 to close the card (and you can’t just stop using it, because besides the $4.95 monthly fee, there’s a $5 dormancy fee
It appears that the monthly maintenance fee kicks in immediately, which would be a first, as far as I know. (article and card)
A company called CashStar claims to have figured out how to make online only gift cards work well and says they will be 30% of all gift cards within five years. Makes me wonder though, will online gift card be easier to lose than real ones? (article)
Don’t we know this already? Here is another example of a store that had their gift cards on display so anyone could copy down the numbers or scan the cards, clone them, and wait until they were activated. Don’t we know that card data needs to be protected already? The incidence of this kind of thing with Visa/MasterCard type gift cards is almost nil because the card data is protected.
Apparently a member of the night crew at a Post Office in Willow Grove Pennsylvania stole gift cards that were intended to be used to reward employees of the post office. In all, he stole 35 of the $5 gift cards. Five dollar gift cards? This could help explain what is wrong with the Postal Service, thinking that $5 actually motivates anyone.
GiftCardRescue.com has launched a site GiftCardBalance.com that lists the contact information (URL’s and phone numbers) for quite a few gift cards. It is a convenient place to find the balance check information. Or, you could just look on the back of your card for the same information, seeing as you are going to need your card to actually check the balance.
A site where you could actually enter any gift card number and select the issuer to check the balance would be more helpful.
Update 5/19/10: Something is funky with the GiftCardBalance.com site and it appears that it may no longer be trustworthy, especially in light of recent scams involving fake gift card balance sites.
I’ll admit it, I don’t get excited about gift card deals very often, but Restaurant.com does have some smoking deals on gift cards. You can normally buy a $25 gift card for $10, but until February 28th, they are selling all gift cards for 80% off. That’s just $2 for a $25 gift card. Perfect if you have an upcoming dinner at a restaurant, or there is one that you frequent. Enter the code DINE when you check out. (article)
You’ve got to give it to AMEX to show us how it is done. They are offering select card holders (read, risky card holders) a $300 gift card if they fully pay off their account. Once they receive their gift card their account will be closed.
Behold the proper use of the carrot methodology. (article)
February 22, 2009 by Advocate · Leave a Comment
Filed under: Fees & Breakage, Legal & Regulatory, Scams
Filed under: Fees & Breakage, Legal & Regulatory, Scams
This has to be the most blatant example of the government not “getting” gift cards and the ridiculous fees they charge. The governments in 30 states are essentially using reloadable gift cards issued by banks such as BofA, Chase, and US Bancorp to pay people their unemployment benefits. The problem is, the cards include all sorts of fees, such as overdraft fees (on a debit card?), and fees to withdraw funds. Don’t state governments have enough clout to issue cards for the UNEMPLOYED that don’t carry fees? (article)
As part of a settlement agreement, Subway is giving away 142,500 $2 gift cards. Really, TWO DOLLARS? Seems Subway is smart in the ways of gift cards and knows people have little reason to carry a card around with that little on it on the off chance they might be passing a Subway. And if someone does use the card, they are bound to buy more than $2 worth of goods. Nice move Subway!
And from the most obscure thing to buy a gift card for, Michigan now sells gift cards for hunting licenses. However, you can’t use them in places that actually sell licenses, only online.
I don’t quite understand exactly what the thieves are doing to the gift cards, but apparently they are modifying them and trying to pass them off as regular credit cards. (article) The bad news is that more of this kind of thing will only make retailers more reluctant to accept open-loop gift cards.
Apparently open-loop (Visa) type gift cards are a favorite of thieves that work with stolen credit card numbers because gift cards when presented at the cash register are generally easier to scan with – they don’t require any ID since they don’t actually have a name on them. So, thieves like to load gift cards with real stolen credit card numbers and use them to buy goods which they can then sell for cash or return for cash. (article)
Undoubtedly, as this gets more popular with thieves, it will make retailers more reluctant to take these gift cards and harder for consumers to redeem them.
In setting up my own business that dealt with gift cards, one of the hardest things was to try to distinguish between gift cards and normal credit/debit cards. After a lot of work, I figured out the fingerprints of a gift card but it wasn’t easy and they aren’t obvious. Perhaps the industry would do well to make gift cards unique in some way so retailers can tell the difference.
Hernando County (FL) Commissioner Jim Adkins is proposing a program where people who purchase a foreclosed upon home will receive up to $5,000 in gift cards as an incentive. Huh? Does he really think that offering gift cards instead of cash will pull more people to take advantage of the program? Perhaps he should talk to the attorney who received $125,000 in $10 gift cards as his fee (below). (article)
Update 5/15/09: Alas, the judges ruling was overturned and a higher court ordered the attorney to receive his fee in cash. (article)
After settling a semi-frivolous lawsuit, a retailer (defendant) chose to pay the attorneys part of the settlement ($125,000) $10 gift cards. That is, they gave him 12,500 $10 gift cards. The judge upheld the payment. (article) Unfortunately the decision was later overturned and the retailer had to pay the attorneys with real money.
This will be the third case of fraudsters managing to hack open-loop gift cards I have seen. (article) They are generally harder to scam because they are so well packaged it is nearly impossible to get the card out of the packaging and swipe it (to then later clone it and wait for it to be activated) without ths showing on the packaging.
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