This Reuters archive report says Walmart Inc, Target Corp and Best Buy Co changed parts of their gift card programs after New York and Pennsylvania regulators pushed for tougher anti-fraud controls.
Barbara Underwood and Josh Shapiro, the attorneys general of New York and Pennsylvania, announced the changes on Tuesday as part of a campaign that had been running for more than a year. The retailers reduced purchase limits on store-branded gift cards in a single transaction, capped how much could be loaded onto the cards, and barred shoppers from using store-branded gift cards to buy other gift cards.
The companies also expanded employee training so staff could spot scam attempts and warn customers before money was lost. Underwood said in a statement: “By working collaboratively with these retailers, we’ve created a way for businesses to take proactive steps to prevent scams.”
The move came as gift cards remained a major holiday purchase. The National Retail Federation said gift cards were the most requested item on consumers’ wish lists for the 12th straight year, with 60 percent of 7,313 people surveyed naming them.
Regulators said the fraud problem had worsened. The Federal Trade Commission said 26 percent of victims who reported scams between January and September in 2018 had paid with gift cards, up from 7 percent in 2015. The agency also said losses through September from gift and “reload” cards reached $53 million, compared with $40 million for all of 2017, and the median loss was about $500 per case.
Officials said scammers often pressure victims to buy retail gift cards and then use them to obtain third-party cards such as iTunes, Steam and Google Play cards, which can be resold on the black market. They also described common impersonation schemes involving grandchildren claiming arrests or accidents, IRS agents demanding payment, and fake tech support workers seeking money to remove supposed computer viruses.
Underwood and Shapiro said retail gift cards cannot be used to pay bail, lawyers or taxes, and they stressed that the IRS does not cold-call people. They urged consumers not to share gift card numbers with strangers and to contact state consumer officials or law enforcement if they believed they had been targeted.
The source image caption identified a Walmart store in Chicago, Illinois, in a file photo dated 23 November 2016.
Reporting by Jonathan Stempel in New York; Editing by Susan Thomas.
