KNOXVILLE, Tenn. (WATE) — Compared to credit card fraud and other forms of identity theft, gift card scams don’t happen that often.

It doesn’t matter if fraud is prevalent or not when you have given the card as a gift and it doesn’t work.

WATE 6 On Your Side’s Don Dare spoke with an attorney who knows about this scam all too well.

He and his wife gave a cash card to a friend as a gift, and when their friend went to use it, it didn’t work…..

It’s taken several months to get resolved, but attorney Chad Tindell finally discovered why a gift card he bought six months ago was declined. It was a holiday card, he and his wife purchased for a coupled at their church.

“I bought it and gave it to the family,” Tindell said. “A few weeks later they attempted to use it, then let me know it was declined. They had called customer service and they were asked to provide a PIN number. Well, they didn’t have a PIN number. I had never set up a PIN number, didn’t even know that was required. In fact it is not required.”

At grocery stores, you’ve likely seen these racks of gift cards. Tindell bought a Visa gift card, which is actually a debit card and says so.

“You pay the merchant when you cash out, you pay the merchant whatever value is on the card – 25, 50, however much money – this was 500 dollars. Once they swipe it, it’s activated,” Tindell said.

Once the gift card was declined, Tindell spend several months getting his money restored following a rigorous investigation by Visa.

The FTC says despite special packaging to prevent thieves from simply looking at the cards to steal the numbers, thieves will open the packaged cards, take pictures of the numbers, then tidy the envelope back up in hopes no one will notice.

“They then put the card back. Then they have to guess when someone purchases them. They know when the purchase goes through that the card is automatically good and activated. Then they call the customer service line,” Tindell said. “And say, Hey, I lost my gift card, here is the number send me a replacement.”

Since he was buying the card as a gift, Tindell says he did not activate it which is generally referred to as “registering” the card.

“You don’t think about registering it, you just know that they can us it, they can buy whatever they want to,” he said. “There is no way I could have prevented this. Unless, you make it mandatory and I had to register or get a PIN number when I bought it. But if you are giving it as a gift, it is not something you think about because you are restricting another person’s use of it.”

While he’s gotten the $500 returned — and gave a check to the family after the card was declined in January, Tindell has this warning:

“Be careful when you are buying cash cards. They are automatically usable
but there are scam artists out there who steal these numbers and can take — what is your card — and get a replacement and so be very careful. Particularly, if you buy one with a higher dollar amount.”