Bucks Blog: Buying a Gift Card, and Checking It Twice

Although they may lack the drama of a brightly wrapped package, gift cards remain popular holiday presents for finicky or otherwise hard-to-buy-for recipients. The National Retail Federation deems them the “season’s hottest gift.”

But the cards are also popular targets of swindlers and thieves, who buy them with stolen credit card numbers and use them to buy merchandise, or resell them — sometimes in online auction forums. (The Federal Trade Commission suggests avoiding online card auction sites.)

“They’re one of the biggest targets of fraudsters,” because they can act as a conduit for turning stolen credit-card numbers into cash, said Avivah Litan, a security and fraud analyst with the technology research firm Gartner. “They’re harder to trace,” she said, because they’re not associated with a specific individual, as a credit card is.

Because this poses a loss risk to retailers, most knowledgeable, high-volume online gift-card sellers — Apple and Amazon, for instance — have highly sophisticated fraud detection systems to root out card fraud without having to bother customers unless absolutely necessary, she said.

But that is apparently not the case with all retailers. Just last week, a colleague reported the following experience after purchasing an online gift card from Bloomingdale’s.

He paid for the card online, via Bloomingdale’s Web site, expecting the gift to land in the recipient’s e-mail in-box on the designated day. But then he received phone messages from Bloomies asking him to call a special number, citing a potential problem with the purchase. When he called, he was asked for information to verify the purchase.

The customer-service representative, he said, told him that Bloomingdale’s verifies all online gift card purchases by phone, because they are among the first things a thief purchases with a stolen credit card.

I contacted Bloomingdale’s, first by e-mail and then by phone, to follow up. Could it possibly be true that the store verifies all online gift card purchases by phone? If so, why not just drop online sales of the cards and have customers order them by phone, since the sale is going to involve a call anyway?

A Bloomingdale’s public relations representative, Marissa Vitagliano, replied with an e-mail that did not really address the issue. “As with other types of cards, gift cards are not immune to exposure to fraud and theft,” she wrote. “The gift card owner should monitor the balance of the card regularly to ensure its value. If an owner would suspect a problem, he or she should immediately call the phone number on the card to report any concerns.”

She didn’t respond to further inquiries seeking details. So it’s unclear just what Bloomingdale’s formal policy is regarding verification of online sales of gift cards.

Have you ever been contacted by Bloomingdale’s or any other retailer after buying a gift card online?

Article source: http://bucks.blogs.nytimes.com/2012/12/19/buying-a-gift-card-and-checking-it-twice/?partner=rss&emc=rss