Gift card fraud more prevalent than people realize

More people are speaking up about fraud involving gift cards following a story CHCH News covered last week about a family losing out on a $300 purchase.

Lawrence Diskin said he has received the $300 owed to his daughter after she discovered her Apple gift card of the same value was empty last week.

“It came in with nothing else, no apology, no further explanation how it happened, just the cards,” Diskin said.

In a package sent to him were two Visa gift cards with protective labelling on the back of the barcode.

Diskin said he was notified about their refund a day after he and his daughter Lainie met with CHCH News to share their story about her prepaid purchase at a Dundas Shoppers Drug Mart earlier in the week.

READ MORE: Dundas family warns against 3rd-party retailers after losing $300 on empty gift card

Diskin said Apple officials told them the money was redeemed three minutes after she purchased it.

“I cant tell you how many people have stopped me in the street, recognizing me off last week’s item, saying ‘it happened to me’. They all had similar stories,” Diskin said.

Many people CHCH News spoke to err on the side caution involving gift cards sold at third party retailers.

According to ex shoppers drug mart employee Patti Jensen, problems with prepaids have started in the last 10 years.

“[Customers] would always come back and say there wasn’t any money in them, they couldn’t use it for whatever they were buying,” Jensen said.

READ MORE: Holiday shopping scams to watch out for this season

Blackhawk Network, who manages the gift cards sold at Shoppers, sent the refund to Diskin.

Retail Analyst Bruce Winder said empty gift cards right after purchase at retailers became a common occurrence starting last year and it became unclear who beared responsibility for the lost dollars.

“As thieves get more advanced, more sophisticated, [retailers are] going to have to build in detection systems in order to know when it is fraud,” Winder said.

Winder said companies are looking at ideas to improve security.

“Using AI to try and profile people in their stores, identifying certain habits, at certain times of day, so they’re trying to use technology and money is being thrown at it right now as an issue.”