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The Nation’s First Law Protecting Against Gift Card Draining Has Passed. Will It Work? (www.propublica.org)

submitted 3 months ago by [email protected] to c/[email protected]

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[–] [email protected] 27 points 3 months ago (3 children)

An estimated $570 billion is loaded onto gift and prepaid cards each year in the United States

Holy crap, I had no idea that so many people buy these stupid things. My mother used to buy them. She'd give Visa $5 in order to give me a $100 gift card. I told her she was wasting her money and she should just write me a check but she just kept doing it.

Based on the fee schedule at this site, that 5% fee is normal. That means these companies are making $28.5 billion per year providing no useful service at all.

[–] [email protected] 22 points 3 months ago* (last edited 3 months ago)

they're huge in the homeless community. it's the only way a person with no bank can pay for most things these days.

the homeless community is rapidly growing too.

[–] [email protected] 13 points 3 months ago (1 children)

Starbucks had 1.2 billion USD held on Starbucks cards/the app back in 2016, “enough to be a midsize bank,” and I can only imagine it’s gone up since.

[–] [email protected] 2 points 3 months ago

$1.2 billion would be a very small bank. But also, that money is not able to be used by Starbucks. It's not "earned" yet. I don't know the details on what they can invest it in, but I wouldn't be surprised if it has to just sit in a bank account earning very little.

Even a small bank would be able to invest the money much better.

[–] [email protected] -3 points 3 months ago* (last edited 3 months ago) (1 children)

If I can make an assumption; it’s your fault. I’m just trying to gift you something you’ll appreciate. Can’t you help with sone sort of wish list or favorite store? I know gift cards are a ripoff but no one uses checks anymore and without any constraints I have no reasonable way to gift you something you’d appreciate

[–] [email protected] 1 points 3 months ago (1 children)

The government should consider printing some sort of paper voucher as a representation of money to be used in instances such as this. /s

[–] [email protected] 2 points 3 months ago* (last edited 3 months ago) (1 children)

I do remember such a thing from decades ago, but haven’t seen anything like that in years. Do people still use it? Do i need to goto some sort of museum? Can I use it online or from my phone?

[–] [email protected] 1 points 3 months ago

It doesn’t matter—you can use it with your drug dealer, which is what you probably wanted anyway.

[–] [email protected] 11 points 3 months ago (1 children)

Why bother telling retailers how to package them? Just hold the card companies financially responsible for the theft/scams and force them to honor what the customer paid for in the store. I'm sure the card companies will figure out on their own how to stop the thefts and scams, once they are actually responsible for the money.

[–] [email protected] 4 points 3 months ago* (last edited 3 months ago)

That still forces customers to report fraud, and then fight whatever refund hurdles the company can implement. Most people will not do the above for a few dollars.

Doing both is an even better situation. Make them fix the packaging to a minimum standard but also put them on the hook for fraud loses.

[–] [email protected] 8 points 3 months ago

Is the nation OK?

[–] [email protected] 7 points 3 months ago (3 children)

Aren't gift cards activated electronically?

Maybe it's just a Canadian thing but if your gift cards are sitting preloaded and tappable like... who the fuck thought that was a good idea.

[–] [email protected] 28 points 3 months ago (1 children)

From the article..

Card draining is a scheme in which thieves remove gift cards from stores, capture their numeric codes or swap them out for counterfeit cards, and place the products back on display. When an unsuspecting customer loads money onto a tampered or counterfeit card, criminals access it online and steal the balance.

[–] [email protected] 3 points 3 months ago

I've experienced this in the past. Luckily the store Winners (a Canadian chain) was good enough to replace the cards.

[–] [email protected] 9 points 3 months ago

From the article it sounds like what they're doing is replacing the activation keys on the cards and then putting them back on the shelf, then when the card is activated what really happens is the money is loaded on the card they have.

[–] [email protected] 6 points 3 months ago

Each card has an activation code that the cashier scans. They then enter a dollar amount to load on the card. That's how it is supposed to work. What happens in this scam is that thieves shoplift a couple cards. They take one card, for themselves. Then duplicate the activation code from that card, and the activation codes on the other cards which they then secretly put back on the rack at the store. When someone goes to the store and buys an altered card, the cashier scans it and loads the purchaser's money onto the card that the thieves already have.