Gift Card Fraud Rumors and Reality

Opinion: As gift cards soar in popularity—some $25 billion in gift cards are expected to be sold this holiday season alone—the attempts to use them fraudulently have also soared.

As gift cards have soared in popularity in recent years—some $25 billion in gift cards are expected to be sold this holiday season alone—the attempts to use them fraudulently have also soared. But some of the theft techniques are woefully out of date.

Does this mean that gift cards are secure financial tools for retailers and consumers? Not necessarily, but today's gift cards are certainly no less secure than traditional credit cards, with most retailers and issuers willing to be flexible with consumers who have been burned. The most popular gift card fraud rumor hitting Web discussion forums and many newspapers is that there are bands of thieves who copy down gift card numbers out in the open and then wait for a hapless consumer to buy—and thereby activate—the card. The thief then uses the card anywhere he doesn't have to physically present the card, such as online.