Ken Paxton
Consumer Protection

Make Smart Decisions When Giving Gift Cards

With the arrival of the holiday shopping season, millions of Texans are expected to purchase prepaid gift cards for friends and family all across the state. Easily mailed to far-away loved ones and increasingly easy to purchase, gift cards undoubtedly simplify shopping at a very busy time of year, so they are more popular than ever. According to the National Retail Federation, shoppers nationwide spent an estimated $26.3 billion on gift cards at retailers last holiday season.

Unfortunately, recent reports indicate that the Grinch and his cronies have their eyes on gift cards as they scheme to steal Christmas this year.

Sources from around the country have reported seeing scam artists record the numbers on not-yet-activated gift cards. Once the card is purchased and activated, the crook pounces and drains the cardís value before its recipient can benefit from their gift. Unfortunately, itís often days or even weeks before customers realize that their holiday spending money was stolen.

Texans can protect themselves by asking a store clerk for gift cards from behind a counter (or that have not otherwise been accessible to the general public). Some gift cards already have built-in security measures, such as an additional scratch off code. But even then, purchasers must make sure no one has tampered with either the card or its packaging.

In addition to avoiding outright theft, Texans should pay attention to the card issuer before deciding which gift cards to purchase. Gift cards purchased from businesses that later declare bankruptcy can become worthless or worth far less than face value. In a recently reported case, one bankrupt company only honored one-quarter of the value on its gift cards. As a result, customers who thought they had $100 to spend only got $25.

Donít let someone get in the way of this yearís holiday season. Stay vigilant and well-informed. Customers who buy or receive a gift card that lacks any portion of the pre-paid balance should immediately notify the card issuer and ask for help.

Happy holidays.

ABOUT CONSUMER ALERTS - The Office of the Attorney General accepts consumer complaints about businesses. When a pattern of complaints warrants intervention, the Attorney General can file a civil lawsuit under consumer protection statutes, sometimes with the result that a company is required to pay restitution to consumers -- see our Major Lawsuits page. However, when a consumer is swindled by a con artist, filing a complaint cannot help. Civil litigation can sometimes put a very unscrupulous business out of action, but often cannot produce restitution.

Individual con artists generally fall under the jurisdiction of a criminal prosecutor -- in Texas, this is the district or county attorney. But even when they are charged and convicted, these individuals usually have spent the money as fast as they have stolen it. A person who is the victim of fraud should report the incident to the police or sheriff. But by far the best thing is for consumers to be aware of fraud, so they are not swindled in the first place. For this reason, the Office of the Attorney General posts these Consumer Alerts about possible scams and schemes that come to our attention through citizen contacts to our office or other sources.