Nov 22, 2019 3 min read

Many people have begun shopping for holiday gifts. Giving gift cards has become a very popular option in recent years. That allows the recipient to purchase what he or she wants most, always at the right size. A card is quick to buy and easy to wrap or mail.

Sounds like a pretty good option. And because so much money is spent on gift cards, crooks have discovered this is a good area to hunt for victims.

Today, we are going to discuss some of the ways gift cards are compromised, to keep you from being scammed. It is important to be careful where you purchase your gift card. Buy it from a recognized and trusted source. Sometimes, you see discounted offers on the internet when buying the cards. While we all like to save money, be careful. It is easier to scam someone if that individual does not have to look you in the eye, and the scammer can be very difficult to find if there is a problem.

There can be a legitimate secondary market for people who received a gift card they will never use. They may be willing to take less since they often cannot return the card for a cash refund, however, there is a much greater opportunity for problems. The balance may have been drained or the card may not have been activated. Be careful of flea markets and other questionable sites.

When buying a card from a known source, be sure to inspect the packaging. Often, crooks will carefully open the card and copy down the numbers. They may carefully scratch off the coating covering the PIN. You may not notice it is missing or they can buy replacement coverings.

If the card looks tampered with, pick a different one. It has been suggested that you select a card further back in the stack or on the hook, which makes it a little harder for scammers to steal information. Also, buying from a rack at the front of the store may be a little safer.

Thieves actually use software to check card numbers to see whether the cards have been activated. When they show up as activated, thieves drain the money value quickly, making your card worthless. Using the cards quickly can help to reduce opportunities for crooks. Because of this, buying Christmas gift cards at the last minute may offer some protection.

Check the activation code printed on your receipt to make sure it matches the numbers on the gift card. If it does not, there is a problem. The card you just purchased may have already had value removed. Be observant at the checkout. While this is not usually the biggest problem area, some clerks have been caught switching cards at the cash register.

You should never have to provide personal information, such as Social Security or home information when buying or using a gift card. Neither the Internal Revenue Service nor any government agency will ask you to make payments to them with gift cards.

Gift cards can be a great choice, but use common sense and be careful.

Gary Boatman is a Monessen-based certified financial planner and the author of “Your Financial Compass: Safe passage through the turbulent waters of taxes, income planning and market volatility.”

To submit columns on financial planning or investing, email Rick Shrum at rshrum@observer-reporter.com.