STATEN ISLAND, N.Y. – Gift cards make for quick and practical gifts, but buying them involves hidden risks, consumer experts warn.
Some gift cards could have hidden fees or charges for inactivity. And some charge a fee for activation, so it’s important to read the fine print before buying them or when receiving one as a gift, New York State Comptroller Thomas P. DiNapoli previously told the Advance.
And gift card purchases make you an easy mark for cybercriminals, who can easily tamper with the PIN or bar code to steal the money you put on them, police say.
Several major retailers in New York City discovered last holiday season that their gift cards had been tampered with, the NYPD said at the time. If consumers had bought the tampered cards, they would have lost the money loaded onto them.
Criminals copy down gift card numbers, then scratch off the coverings over the PIN, giving them access to card balances once they’re activated by an unsuspecting consumer. They replace the code coverings with stickers, making it tough to tell that the cards have been tampered with, Consumer Reports reported.
Criminals can still gain access to the funds with the PIN covering intact by using online bots or other kinds of computer software to guess the PIN code. Shorter codes are easiest to crack, police said.
Even if the cards haven’t been tampered with, you can still lose your money if you don’t read the fine print.
Watch out for hidden fees and restrictions. While some gift card sellers have done away with inactivity fees — a penalty charged if the card isn’t used within a certain period of time — consumers should still ask, when purchasing the card, whether those fees apply, DiNapoli warned last year.
And, if you receive a gift card, be sure not to leave a balance of unused funds. Last year, Americans left $1 billion of unspent cash on cards, according to the National Retail Federation.
Here are a few tips for avoiding fraud, or hidden fees, when buying or using gift cards, according to Consumer Reports and DiNapoli:
Buy gift cards online. When you buy then directly from retailers, chain restaurants, or other issuers, criminals don’t have easy access to those cards.
Look for cards stored out of reach. If you absolutely have to buy a gift card in a retail store, look for those kept behind the counter or in well-sealed packaging, Consumer Reports advises.
Examine the packaging. If the cards are out in the open on a rack, look at a wide assortment and check to see if the packaging has been tampered with. Be sure the cards are in view of surveillance cameras or store employees.
If you receive a card as a gift, change the security code and use the card quickly. The longer a card sits around, the more likely a cybercriminal is to steal the balance.
Read the fine print. Look for conditions that can decrease the value of the card. These may include charging:
- Service fees when the card is purchased.
- Fees to call and check the balance remaining on the card.
- Replacement fees for lost or stolen cards.
Register your card with retailers. By registering the card, owners can be identified, which improves the opportunity of finding and claiming the unused card balance.