With gift card sales skyrocketing this holiday season, a new scam that involves reselling and auctioning discount gift cards is befuddling bargain hunters as they try to check out at the register.
An unapproved report filtered out of the Lee County Sheriff’s Department on Wednesday that said a man in Lehigh purchased a Lowe’s gift card said to be worth $800 for $400 on Craigslist, the online community bulletin board for goods, pets and services, only to find the gift card had a zero balance on it.
While this was an isolated incident in Lee County, and the officials from the Collier County Sheriff’s Office said they have yet to see any reports of a crime like this, law enforcement agencies warn consumers to be wary of bargain gift cards sold by third party vendors.
“We do caution people not to buy gift cards from auction sites or classified ads,” said Jenny Shearer, a spokesperson with the FBI in Washington, D.C.. “If you want to buy a gift card from a retailer, go to that retailer.”
Sgt. David White, an investigator with the financial crimes division of the Collier County Sheriff’s Office said that buying gift cards from unknown sellers from online sites like Craigslist and online auctions is risky, as there is no way to ensure you’re not getting ripped off.
“Why would you be buying a gift card from somebody you don’t know off Craigslist?” White said. “Buy from a known entity. Be sure that it’s going to work when you use it.”
The National Retail Federation projects Americans will spend $24.78 billion on gift cards this holiday season, according to a report published in November. That’s nearly twice the gross domestic product of Iceland.
The same report found that of the holiday shoppers polled, more than 77 percent planned on purchasing at least one gift card this year — the bulk of which to be redeemed at department stores and restaurants.
As of Wednesday afternoon, the Southwest Florida/Fort Myers Craigslist website had 27 posts for the month of December advertising discount or partially spent gift cards from retail stores. These offers ranged from a $50 gift card from Tiffany & Co. for $35, to a $100 gift card from Sports Authority for $80, to a $125 gift card from Victoria’s Secret for $100.
Karen Cobb, a spokesperson for Lowe’s, acknowledges the growing trend to give gift cards during the holidays, but she people should purchase gift cards directly from retailers, whether that be at the store location or online.
“If you are purchasing from a third party you have no way to validate the amount,” Cobb said during a telephone interview on Wednesday.
So what are people to do with their unwanted or partially spent gift cards?
Bring them to us, said Erica Carr, a sales clerk at Rainbow Records, an independent new and used CD and DVD shop in Cape Coral.
Carr said her store exchanges gift cards for store credit. The gift cards are then used to purchase CDs and DVDs from the retailers, as their prices are often cheaper than the shop’s usual suppliers. To ensure there’s no confusion, Carr said that except for iTunes, the shop accepts almost all gift cards.
“Avoiding getting scammed is easy,” she said. “Just look on the back of the card, contact the store and type in the gift card number.
“We have to be able to call the number to verify the balance,” Carr said.
As for people getting cheated when they purchase discount gift cards on the online auctions and on websites – “People always find a way to scam,” Carr said.
The FBI classifies this scam as a form of Internet crime, Jenny Shearer said. She points to the FBI’s 2009 Internet Crime Report, which ranks Florida at No. 2 in the nation for total number of reports of Internet crime, and No. 2 in the nation for Internet crime perpetrators per 100,000 people — with no data given on crimes involving gift cards specifically.
Shearer said it comes down to common sense: “If it looks too good to be true, it probably is.”