You may not be able to give your kids' favourite teachers a gift card, but for many people they are the perfect gift to receive because you can buy just what you want, and the perfect solution for gift givers who are time-poor or out of ideas.
But, scammers have worked out a way to rort this system, says QUT consumer expert Dr Gary Mortimer from QUT's School of Advertising, Marketing and Public Relations, and it all has to do with the four-digit PIN number on the back and online shopping.
"More and more shoppers are using gift cards to buy online and being surprised when they find the card they received for Christmas has already been used," Dr Mortimer said.
The scam goes like this: the scammer selects several cards from a busy retailer, scratches or peels off the back panel exposing the PIN and writes down the number.
"Then they put the cards back on the shelf and wait a few days, which is enough time for some of the cards to sell and have value added to them. Then the scammer goes online, keys in the PIN codes, until they find an activated card.
"This tends to be more prevalent at Christmas time, as gift cards tend to be purchased and activated, then placed in the post and not used until after 25 December.
"Always check you are buying a gift card with the PIN panel still intact."
Dr Mortimer said we would spend more than $1.5 billion on gift cards this Christmas and, although there are benefits, there are also a few cautions to be remembered about giving and receiving them:
- Gift cards allow shoppers to set and stick to a budget; whether that's $10, $20 or $50.
- They are convenient, so you can pop one in an envelope and post it anywhere.
- They avoid those embarrassing situations of unwanted gifts.
- Most importantly, gift cards tend to be redeemed after Christmas therefore the recipient can get more value, by shopping during the clearance sales and taking advantage of heavy discounting.
He said downsides for gift cards are:
- If you drop one in the car park or it gets lost in the mail, it's gone for good. The retailer can't de-activate it or give you a new one.
- Check the expiry date. Major retailers, like Coles and Myer, generally have two years from activation, as does, Apple iTunes. Westfield, just one year. Smaller retailers may only carry six months.
- If you don't spend it, you lose it and they keep it. It is estimated that 20 per cent of gift vouchers are never redeemed, which means retailers pocket millions of dollars.
- If the business goes broke, they may not honour the gift card, even though they have the cash. Borders book stores and WOW Sight & Sound's demise are a case in point.
- You generally don't get change. If you use a $50 gift card to buy a $48 shirt, a $2 credit remains on the card. So, you have to come back and buy something else.
Dr Mortimer's advice for shoppers this Christmas when it comes to gift cards:
- Buy from a reputable retailer
- Look for gift cards that allow you to spend across multiple retailers, like the Coles Myer card, Visa gift card or Westfield card. That way, you get more choice.
- Check the expiry date and any special conditions. A gift card for a fancy restaurant, may not be of value if you can't redeem on a Friday or Saturday night.
Media contact: Niki Widdowson, QUT media, 07 3138 2999 or n.widdowson@qut.edu.au
