When her son was born three months prematurely, Karen Ekstein received two $100 prepaid Visa gift cards from Shoppers Drug Mart. She waited more than a year to use them, hoping to buy something meaningful.
But she had a nasty surprise after taking the gift cards out of the sealed package and calling to activate them. Someone had already activated and used them.
“I am left with two cards in a sealed package, worth nothing,” she said.
Thieves often go to stores and record the gift card numbers, which are visible to customers because the retailers need to scan them.
Some newer cards have a personal identification number (PIN), which allows the issuer to verify that the person activating the card actually has the card in hand.
Gift card fraud is a well-known problem. At the Retail Council of Canada’s website, you can find a link to a webinar about it, using an expert from DataCandy.com.
Ekstein, a professor at George Brown College’s hospitality and tourism school, tried calling the Visa issuer. She was told that she should have filed a dispute within the first 120 days of receiving the card.
“They expect a customer will manage their gift card as they would a credit card,” she says. “This makes no sense. People don’t routinely spend gift cards within 120 days of receiving them. And they don’t monitor the balance of a gift card as they would a credit card.”
Shoppers Drug Mart has helped Toronto Star readers with other worthless gift cards. I asked spokesman Sheamus Murphy to help with Ekstein’s case.
There is no 120-day deadline for investigations when a financial gift card is involved, he emphasized. Visa may have been talking about the timeline for resolving disputes in credit card transactions.
Shoppers Drug Mart’s financial gift card supplier has implemented new security measures to prevent fraud, he said. Cards will be shut down at the point of sale if they have been used by thieves before being activated.
“That means customers can have greater confidence they will not be sold financial gift cards that have been activated by fraudsters. If issues do arise with any gift cards, we advise our customers to contact our customer call centre at 1-800-SHOPPERs and we will take the necessary steps to investigate and resolve any issues.”
As for Ekstein, she will be getting $200 in Shoppers Drug Mart gift cards to use at the store. She didn’t get a refund or a new Visa card since she didn’t have an activation slip (her phone activation was rejected) or a purchase receipt (the donor no longer had it).
I also heard from Anne Amodeo, who received a $100 President’s Choice MasterCard gift card last December. When she tried to activate it at the cash register, she found only five cents left on the card. The other $99.95 had already been used.
She called the number on the back of the card and filled out a dispute form. It took three months for an investigation, but she was told a new card would be sent by mail in late March.
“I started calling weekly to say the card hadn’t arrived. They kept telling me to wait five to seven days,” she said in early May. “The last time I called, they told me to stop calling. They would notify me when they found out what happened to the card.”
Amodeo spoke to her friend, who had purchased several gift cards at the same Loblaw’s store in Richmond Hill. Two other cards besides hers had been hijacked by thieves.
After I contacted Loblaw’s, Amodeo got an apologetic call from the supplier and a promise to send a new card within seven to 10 days. She is crossing her fingers that it will come.
“Providing our customers with a convenient and secure selection of gift cards is important to us. We are constantly evaluating and working with our third-party gift card partners to ensure there are built-in security measures in place to deal with potential fraudulent use of cards,” said Maria Forlini, Loblaw’s senior vice-president of PC Services.
“We also suggest that customers treat gift cards as cash, keep their receipts and immediately report any concerns they might have.”
Here is my advice: Buy gift cards from a trusted source. Activate them right away. Check the balances regularly. Complain to the retailer as soon as possible when you detect signs of fraud.
How to avoid gift card scams:
• Beware of gift cards sold at Kijiji or Craigslist at huge discounts, such as 50 per cent off.
• Find a vendor, such as CardSwap, which validates the amounts and guarantees all transactions.
• Look for cards that can be registered and reloaded, lessening the chances of fraud or theft.
• When you get a receipt showing a card’s balance, make sure the gift card number on the receipt matches the gift card number you have.