An interesting change of Policy by Loblaws about the purchase of a Gift Card, evidently due to a high level of fraud with stolen credit cards, Loblaws now only allows you to buy these gifts with Cash or Direct Withdrawal.
The Police have warned retailers of the scam where someone steals a victims credit card (or complete identity), then uses it to purchase gift cards which then become effectively cash for the felon involved in the fraud. Sounds like a straight forward scam, except I have an odd question about this :
Every time I have purchased a “gift card” from a store, I have been told to wait 24 hours while the card is “activated” at the vendor in question (unless it is a gift card with the store in question). The card that I have purchased has an ID code on it, and if I use it the card itself is scanned or read in some fashion. If there is a fraud involved can’t this be stopped quickly? If the Credit Card is identified as fraudulent within 24 hours, then all of these transactions can then be voided too, can’t they?
This makes the assumption that the credit card fraud is identified quickly, which in most cases is not the case it seems. As long as the felon doing the defrauding is not too greedy or too obvious, the fraud typically is only discovered at the end of the month, unless the felon is doing spending that is flagged by the system as “out of the ordinary” for the card holder, no electronic alarms will go off, and it will be up to the consumer to identify the fraud (at which point presumably the gift card has already been activated and used).
Another interesting way to “launder” stolen money by the underworld, and the reaction by Loblaws is understandable, but what about stolen Bank Access cards?
CBC does point out the way this fraud can be cut down:
David Wilkes with the Retail Council of Canada said fraud can be effectively cut down once all retailers convert to credit card terminals that read security chips.
So the next time you are thinking about buying a Gift Card for a friend remember this new rule at Loblaws.