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WASHINGTON -- Reports about a new gift card scam detailing how consumers could lose money from gift cards if criminals steal the card numbers from the back of the card are accurate but somewhat misleading, according to the National Retail Federation (NRF).
"The retail industry has implemented sophisticated safeguards to prevent thieves from obtaining, and using, consumers' gift cards," said Joseph LaRocca, NRF v.p. of loss prevention, in a statement. "Most gift cards are outfitted with scratch-off security codes and protective packaging, in addition to a special verification number distinguishing one gift card from another. Also, retailers have created complex back-end systems to prevent criminals from obtaining proprietary gift card information."
LaRocca said that while instances where consumers lose money from theft of gift card information are extremely rare, consumers could take several steps to be safe.
"Holiday shoppers are encouraged to keep the original receipt from the purchase of gift cards in the unlikely event that they need to return a card to a retail store because it has been used," he said. "Retailers can then check gift card purchases to verify that the card was fraudulently used and in most cases can refund the gift card value to the customer."
Other recommendations for keeping gift cards safe include: checking the section on the back of the card where the personal identification information is before you purchase it to make sure the ID is not already scratched off; and only purchasing gift cards from reputable sources, and not online auction sites where they are likely to be counterfeit or were fraudulently obtained.
NRF estimated that gift card sales will total $24.81 billion this holiday season, up from $18.48 billion last year.