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Cyber Risks · Krebs on Security

The Role of Phony Returns in Gift Card Fraud

Summary: Krebs on Security reports that many steeply discounted gift cards sold online are merchandise return cards produced by thieves who steal goods from one store and return them without a receipt at another, then sell the cards through resale sites. A reader bought a $165 Petco card for $120 on raise.com, and a Petco manager told her the cards come from items stolen at one location and returned at another; a joint KingRogers International and The Retail Equation study found roughly nine percent of U.S. returns are fraudulent, and the National Retail Foundation estimates the problem will cost U.S. retailers nearly $11 billion this year.

Bottom line: Nearly $11 billion in annual retail losses is being financed by consumers who think they are simply saving 25 to 30 percent on a gift card, and the resale sites listing those cards are not disclosing that they are merchandise return cards.

Read the original at Krebs on Security ↗

Topics
Fraud & Scams
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