LUBBOCK, Texas – A police report obtained by EverythingLubbock.com Wednesday detailed an incident regarding a compromised Walmart gift card that was under investigation in Lubbock as a fraud. The case serves as a reminder that while gift cards are a common holiday purchase, they can also be a common target for scams.
The police report said that the compromised gift card received in the mail only had $1.30, despite the initial balance being $150. According to the report, neither the recipient nor the buyer of the card had made any purchases.
Upon looking at the gift card’s transaction history, the recipient noticed a series of purchases made on Walmart.com that the recipient did not recognize and were made prior to receiving the gift card. The recipient filed a report with the FTC and contacted Walmart’s Customer Service, who offered to send recovered funds in the amount $1.30 to any Walmart store.
So, what can be done in a situation like this?
Texas Tech University Associate Professor of Marketing and Supply Chain Management, Dr. Deidre Popovich, told EverythingLubbock.com that the recipient took all the correct steps in this situation. They reported the scam to the FTC (reportfraud.ftc.gov), the retailer, and the local authorities.
“The fraud can also be reported to the state attorney general’s office, since they investigate larger fraud issues like the FTC.” said Dr. Popovich.
“Unfortunately, there isn’t any other recourse consumers have in this circumstance.”
When it comes to taking preventative measures, EverythingLubbock.com reached out to the Lubbock Police Department for advice. They said that requesting a gift card from behind the counter, where other shoppers don’t have access to them would be ideal.
“There are some stores that do not require a PIN to make a gift card purchase in a self-checkout aisle, making it possible to use a photograph of a card’s barcode to pay for items.” LPD said.
Dr. Popovich stated that gift cards tend to be obtained and used illegally because they are easy for people to find and buy. Gift card fraud is on the rise because these cards have fewer protections for buyers, as compared to other payment methods.
“They are like cash,” she said. “Once you use a gift card, the money on it is gone. On the other hand, credit card transactions have become more secure over time. Unfortunately, the same security measures aren’t available for gift cards” referencing steps like entering a billing address or zip code to verify one’s identity.
“Scammers have also been known to place fake barcodes over the originals so that when a consumer goes to put money on the card, the funds are directed toward the scammer instead of the card… consumers need to examine the gift card carefully before purchasing to make sure the barcode or PIN hasn’t been tampered with.”
Dr. Popovich said that while there aren’t currently a lot of options for customers who have already been scammed, there is hope for the future.
“Federal legislation is being proposed to broaden the consumer protections in the Electronic Fund Transfer Act (EFTA) to include gift cards. If passed, this legislation would help provide greater protection to gift cards in the future.”
In the meantime, LPD recommends that anyone who’s been a victim of theft can make a crime report online, over the phone or in person with the department.