Gift cards can be an easy option for those on your Christmas shopping list who are hard to shop for. It’s still a popular option since it’s convenient for those who have a favorite store or restaurant that they frequent. Since gift cards have been increasing in popularity, consumers need to be aware of the risks that come with them.
Don’t let anyone dupe you into using one for unpaid taxes, according to the Detroit Free Press. This latest scam around the holiday shopping seasons involves con artists who call unsuspected victims and tell them to purchase an iTunes or another pre-paid card to pay back taxes. This warning has informed consumers never to purchase pre-paid cards or to provide any personal information, including a PIN number or card number, to someone they don’t know.
At CVS and other retail stores, the Christmas music has been interrupted by an important message, “Attention shoppers, if you get a call from the IRS saying to pay a bill with a gift card – it’s a scam!”
The IRS never calls consumers about their taxes, reports WFMY News 2. You’re likely to receive a letter in the mail if there is an issue with your taxes. This iTunes gift card scam is likely to follow into January, 2017, with the tax season in full swing.
Gift cards can make a terrible gift if it’s already drained of its value. Here’s how you can protect yourself so that your gift recipient can buy the present they actually wanted. According to Consumer Reports, you should avoid purchasing gift cards at accessible displays, which allow scammers to copy down the card number and scratch off the strip covering the security code, then replace it with something similar that goes over the security code. Scammers will use software that tells them when the gift card has been activated and ready to have the balance stolen.
“The crooks can see as soon as someone activates the cards, because they’ve automated all this with software that periodically checks the card balance via the internet,” David Farquhar, unit chief in the FBI’s Criminal Investigative Division, told Yahoo!.
The scammers will use the money you loaded onto the gift card to purchase a new Xbox video game console that retails for $600, but that they will later sell for $500.
One way to avoid this scam is to change the card’s security code or PIN number after purchasing the card. Let the gift recipient know that you did it and why, and then give them the new code. Of course, you can always avoid this problem by purchasing gift cards online directly from the retailer. Choose to ship it directly to your house or to the recipient.
However, gift cards are dying in general, according to a survey by Bankrate. Half of consumers say they plan to give a gift card this year. That’s not great news for the 27 percent of Americans who say they never like to receive one for Christmas, reports The Street. Younger generations who have never experienced a holiday, birthday, or special occasion without gift cards seem to hate them the most. Meanwhile, 34 percent of younger Millennials (ages 18 through 25) want a gift card, and 53 percent prefer to receive a tangible gift.
However, a new First Data study revealed that digital gift card usage is on the rise, driven by those between the ages of 18 to 34, according to Retail Customer Experience. The largest e-gift card buyers are those between the ages of 35 to 54, due to convenience.
“Consumers want preference and they want it now — there are no exceptions to this rule when it comes to gift cards,” Krista Lee, director, product marketing, network and security solutions at First Data, told Retail Customer Experience.
“They expect convenience via mobile gifting apps while still having the option to look for the perfect plastic gift card for Mom. Bottom line, it’s critical to pay attention to your customers and their gift card purchasing behavior.”
The study reveals that 72 percent of consumers prefer to receive a gift card rather than a physical gift and 57 percent of buyers prefer to purchase digital cards that can be delivered immediately anywhere. In addition, 36 percent of consumers admitted they self-purchased gift cards to get points or rewards, while others self-purchase gift cards to receive discounts. The report further stated that 21 percent of consumers self-purchase to make online purchases safely and 21 percent like the convenience of not carrying cash.
So, what do you do with those unwanted gift cards? One of the latest trends is to trade gift cards for other newer gift cards. For example, eBay’s CardCash app allows you to trade a $100 Walmart gift card for a $93.50 brand new eBay gift card. Most of the gift cards can be traded for others, or sold for cash, according to the website.
If you purchased a discounted gift card to save money, you would have to wait several days for it to arrive in the mail. Now, most gift cards arrive within minutes. With the CardCash app, you can order the amount you want and let the cashier scan the barcodes off your phone.
[Featured Image by Rachel Murray/Getty Images for Vanity Fair]