Are Gift Cards Really The Best Gift Of All?

The holiday season is here, which means that gift shopping season is well underway. While some of us spend hours selecting the perfect gifts for our loved ones, many of us will give our family and friends gift cards — which they may actually want most of all. In fact, according to the National Retail Foundation, gift cards are the most requested “wish list” items for the holiday season.

Yet, gift cards come with their own sets of challenges, including fraud and difficulty of use. For example, when people purchase gift cards from a store, they may not realize that the PIN number is already visible. If its covering is scratched off, someone may have accessed the gift card’s value.

Another gift card scam begins with a phone call from an imposter who shares that their victim’s Social Security number is suspended due to suspicious activity. After the imposter asks the person to confirm their Social Security number so that they can reactivate it or issue them a new number, they require the person to send them money with a gift card.

According to 2018 FTC data:

  • Since 2015, reports of gift card scams have increased 270%.
  • 41,000 fraud reports to the FTC involved gift cards.
  • From March 2018 – March 2019, people lodged more than 76,000 complaints against Social Security imposters.

Turning to banks to solve gift card scams

Though payments made to scammers through gift cards are untraceable and disconnected from one’s bank account, individuals continuously turn to their banks to help them recover their lost money.

Using the PositivityTech intelligent platform, we explored financial institutions’ customers’ complaints about gift card-related issues, including this one:

I was the victim of a Social Security gift card scam. I was called on my cell where the number of the SSA appeared. I answered the call and was told that my SS# had been used in criminal activity. To protect my money in my bank, I was to purchase the gift cards, scratch them, take photos, and send them by email to X, where my money would be protected until they issued me a new number…. I asked the bank to help me and give me credit for the scam charges and sent them all of the documentation. The bank completed the investigation and responded that all charges would remain on my statement…. I need help. 

By holistically studying all of the customer complaints about gift cards in the CFPB using the PositivityTech platform, we found that:

  • Top complaints relate to challenges customers have experienced when using gift cards.
  • 58% of customer complaints about gift cards relate to fraud.

Empowering banks to prepare for their customers’ complaints

With consumers spending more than $130 billion on gift cards per year, we expect customers to continue sharing their gift card-related complaints with their banks. After being defrauded, customers want to retrieve their money.

If you would like to discuss how you can turn negatives into positives and make the holiday season more joyous for your customers, we would be happy to speak with you.

Wishing all of you a wonderful holiday season!