Some stores ignore security, putting consumer funds at risk

Ahead of the holidays, gift-givers gave away millions of magnetic stripe gift cards charged with billions of dollars in value. By now, the money might already be stolen. Fraud artists can easily drain the value off a gift card even while it sits seemingly safe inside a wallet or a dresser drawer. Some retailers don’t take basic security steps to protect against counterfeiting that would cheat consumers out of the money stored on the cards. Add to that surprising merchant “expiration” fees and leftover balances that revert to the retailers, and the cards may not really be such a good deal for consumers. The digital form of the old-fashioned gift certificate is much easier to track and trace since it fits neatly into credit card payment processing systems and into wallets. They also act as irresistible loyalty cards, drawing in consumers who might not otherwise visit the store — consumers who often spend more than the value of the card once they arrive. And stumped gift givers seem to love them — over $20 billion was charged onto gift cards in 2000, with much more expected when the figure is tallied this year.