Thieves Can Steal Gift Cards Before Use

Consumers will spend nearly $26 billion on gift cards this holiday season, which gives crooks ample opportunity to cash in before you even give your gift.

Thieves can grab the cards in store and write down or scan their info. Or they can steal the cards and then return them later. Then they just wait for you to activate the cards.

"The best way to avoid that is to use your card as soon as possible," Better Business Bureau's Lindsey Haase said. "Scammers can actually deplete the value of your card and you won't even realize it."

Here are other ways to protect yourself:

  • Try thinking of a gift card like it's your kid's Halloween candy. If it looks even a little bit tampered with, don't buy it.
  • Try to buy a gift card that's behind the counter or near the checkout where a store employee is nearby.
  • If you do buy from a kiosk, buy a card from the back since thieves are more likely to tamper with ones that are easy to grab.
  • Get a receipt and give it along with the card. If the card ends up stolen, some stores will give you a new one if you can prove you bought it. But it's also good if the card just gets lost or forgotten.

The National Retail Federation says 73 percent of us will spend about $150 each on gift cards. According to CardHub, Visa is the most popular card, followed by Amazon, American Express, iTunes and Wal-Mart.

Bank cards, like Visa or Mastercard, can be used anywhere, but they charge fees. That's how the make their money. By law, gift cards do not expire for five years and they can't start charging "no use" fees until one year after you bought it.

Retail cards, on the other hand can, only be used at a specific store or restaurant but don't need to charge you extra fees.

"They get cash when the card is sold," Southern Methodist University marketing professor Ed Fox said. "Then it may be weeks, months or years before people come in to get the merchandise, so they get the cash up front. A second thing is they may draw new customers to the store."

Most people who use gift cards end up spending more than the face value, but that's only if you use them. Card Hub says there's about $45 billion in unused gift cards out there. If you have a frayed one you haven't used, many stores will let you exchange it for a new one if you want to regift it.

There's also Costco and Sam's Club, which offer discounted gift cards, but you have to buy several. You can also buy gift cards at a discount from online gift card exchanges. Just be careful to stick to sites that guarantee your purchases.

Online: Bankrate Gift Card Comparison Tool

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