Navigating the Maze of Gift Card Security
Gift cards are a popular and convenient choice for gift-giving, but what happens when their security is compromised? Recently, I discovered a concerning situation at Target highlighting the potential risks associated with gift card tampering and manufacturing errors. This blog post explains what I found, quickly describes the complexities of determining responsibility in such scenarios, and offers advice for consumers and retailers.
The Changing Landscape of Gift Card Racks
In the early days of gift cards, the gift card rack (or gift card mall) in national chain grocery stores symbolized convenience and choice. I loved the ability to pick up a gift card to virtually any store while doing my grocery shopping. However, the landscape has changed. The proliferation of unsupervised and uncontrolled gift card displays has inadvertently paved the way for increased risks of gift card tampering.
This shift isn't just a security concern; it also burdens the merchants selling gift cards on the racks. A restaurant that used to print gift cards solely for its own establishments must now produce cards for various retail racks nationwide to maintain market presence. This scaling up could lead to manufacturing errors as the process becomes more complex and widespread. It's a stark reminder of how our quest for convenience can sometimes lead to unintended consequences, affecting consumers and businesses.
The Target Gift Card Incident: A Case Study
Last weekend, I went to Target to pick up a few holiday essentials. While there, I noticed, once again, the alarming number of unsupervised and uncontrolled gift card displays throughout the store. Driven by curiosity and awareness of the ongoing issues of gift card fraud, I took a moment to visit the large gift card display to see firsthand any new measures merchants and gift card issuers had implemented to combat this problem. I didn't anticipate finding a problem so readily.
Before delving into the unexpected discovery, I want to acknowledge the positive strides I noticed in gift card security. First, several gift cards no longer had exposed gift card numbers. So, I couldn't simply turn a card over and lift the flap to see the associated number.
Why must the gift card number be protected if there's no money on the card? When gift card numbers are exposed, they can be easily copied or photographed before purchase. Scammers then wait until the cards are activated to drain the balances. Concealing these numbers makes it much harder for unauthorized individuals to use the cards without physically possessing them. While determined fraudsters may still attempt to access gift card numbers, more robust packaging is a significant deterrent and evidence that merchants are working to protect consumers from potential fraud.
Some (but not all) Gift Cards Better Protected
Despite witnessing new security enhancements, my recent visit to the Target gift card rack highlighted that significant challenges persist. Firstly, not all brands have adopted these protective measures, leading to inconsistent card security levels. For those brands that have implemented security features, the techniques vary. While this diversity in security approaches can be advantageous — making it harder for scammers to master a single technique — it simultaneously introduces a new challenge for consumers.
The burden of ensuring gift card integrity is mainly on the consumers and cashiers. News outlets, law enforcement agencies, and gift card organizations instruct shoppers to check for pristine gift cards before purchasing. In addition to the five things I say that consumers must do to avoid buying a scammed gift card, a recent news alert posted by the Pinole Police Department noted that consumers should also "feel" the gift card packaging to ensure the physical card is intact--or ask a clerk to open the card before purchase, which affects the presentation and giftability of the gift card.
Placing this responsibility on consumers — many simply looking to purchase a gift — is not an acceptable solution. And putting it on the cashiers with several other job responsibilities is neither sustainable nor effective.
As we move forward, the gift card industry must develop more consumer-friendly security measures that don't compromise the ease and joy of gift-giving.
Vulnerable Applebee's Restaurant Gift Cards
So, returning to my experience at the Target gift card rack.
Despite seeing several gift cards encased in more secure packaging, I discovered a problem with the Applebee's Restaurant gift cards. Each card I examined from this brand had exposed numbers and lifted PIN stickers. Moreover, the top multi-pack gift card had raised perforations, causing further alarm.
Concerned about potential tampering, I took these gift cards to the nearest cashier. The cashier immediately grasped the seriousness of the situation and called for a store manager. The store manager inspected the cards and others on the rack but concluded that the PIN problem must be a manufacturing error since all Applebee's cards looked alike. (In previous instances of tampering, she explained that they found a few compromised cards amidst many that were still whole.)
The manager removed some (but not all) of the Applebee's gift cards from the rack.
Who is Responsible for Risks on the Rack?
Understanding the journey of a gift card from creation to display on a store rack helps identify where responsibilities lie. Let's break down this process:
- Manufacturing by the Brand: It all starts with the brand, for example, Applebee's. Whether contracted through a distribution partner or independently, the brand hires a manufacturer to produce its gift cards. This step is crucial as the brand must ensure the manufacturer adheres to high quality and security standards in making the cards.
- Distribution via Third-Party Gift Card Providers: The next step involves getting the cards from the manufacturer to the display racks. Typically, a third-party gift card provider (e.g., BHN or Incomm) manages the logistics of getting these cards from the suppliers to their final retail destinations and placing them on the physical store racks. Gift cards should be spot-checked (at the least) when placed on the racks.
- Security on the Gift Card Racks: Finally, once the gift cards are on the racks, the responsibility shifts to the merchant, in this case, Target. The merchant's role is to ensure the safekeeping of these cards, including monitoring the racks for any signs of tampering and ensuring that the cards remain secure until consumers purchase them.
Each of these steps involves different parties, but the responsibility for the security and integrity of the gift cards should be shared among them. From the brand that initiates the production to the merchant that displays them, every player in this chain has a crucial role in safeguarding against potential fraud and manufacturing errors--including regular checks of the card racks, prompt removal of outdated or suspicious cards, and possibly reevaluating how and where the cards are displayed to reduce the risk of tampering.
Until then, consumers must remain vigilant.
Always check the packaging of any gift card before making a purchase. If anything looks suspicious, like lifted stickers or torn packaging, alert the cashier or a manager. Alternatively, purchase gift cards online to minimize the risk of physical tampering or buy gift cards directly from the stores or restaurants you want to gift. Buying from individual brands may not be as convenient as purchasing gift cards when you buy groceries, but it will likely be more secure.
Making Gift Cards Gifts Again
In conclusion, the journey of a gift card from production to purchase is fraught with potential security pitfalls, as my experience at Target shows. However, the primary responsibility for safeguarding these cards should not fall on consumers. Brands, manufacturers, distributors, and retailers must intensify their efforts to ensure the integrity and security of gift cards. While consumers can play a role in being observant, the onus of preventing fraud and manufacturing errors lies with those who create, distribute, and sell these products.
As we move forward, I'll continue to advocate for a system where security concerns do not overshadow the joy and ease of giving and receiving gift cards.
Be safe out there,
Shelley
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