Changes to gift card policies meant to cut down on scams

Three major retailers joined with the state Attorney General on Tuesday to reveal their revamped gift card policies that aim to keep their gift cards from being used for payment by victims of telephone scams.

Target, Best Buy and Walmart, among other new policies, have placed new limits on their gift cards, reducing the amount that can be put onto a single gift card and how many can be purchased at once. Best Buy decreased its per-card limit from $2,000 to $500, while Walmart dropped from $1,000 to $500.

Target did not change its per-card limit but made other changes meant to reduce scams.

The changes came after a year of collaboration among Shapiro’s office, the New York Attorney General’s Office and the three retailers.

“Gift card scams are a big issue – a serious issue – impacting Pennsylvanians, particularly seniors,” Attorney General Josh Shapiro said at a press conference. “These schemes and these scams have quadrupled in the past three years.”

In 2015, 7 percent of scam victims told the Federal Trade Commission that they’d paid the scammer with a gift card. Between January and September 2018, that jumped to 26 percent, Shapiro said.

One of the most common scams involving gift cards is referred to as the grandparent scam, Shapiro explained: The scammer calls a grandparent and impersonates their grandchild, claiming they’ve been arrested and need money for bail or a lawyer – to be paid in the form of retail gift cards.

Shapiro said one woman in Pennsylvania lost $31,000 in a grandparent scam.

In another common type of scam, scammers impersonate an IRS agent threatening arrest if a tax debt is not paid immediately via gift cards, Shapiro said. Another involves a scammer calling and impersonating tech support. The scammer claims a victim’s computer has a virus, requests remote access and then refuses to unlock the computer until payment is received in the form of gift cards.

“They target people who aren’t technologically savvy who are just trying to do the right thing to help themselves and their families,” Shapiro said.

The scammers will demand victims purchase the gift cards and read off the numbers on the back, he said. They will then use the gift cards immediately, often to purchase other, third-party gift cards like iTunes, Steam and Google Play.

“This makes it very unlikely that a victim will be able to get any money back,” he said.

As part of their policy changes, the three stores placed new restrictions on how their gift cards can be used to purchase other gift cards.

Best Buy gift cards could previously be used to purchase any third-party cards. Now they cannot. Target has implemented the same policy. Walmart gift cards will only be redeemable for up to $500 in iTunes, Google Play or Steam gift cards.

“By limiting those secondary sales – one gift card for another – it allows us to better police this and, hopefully, stop those who are scamming others,” Shapiro said.

Representatives from the stores said they do not want their customers to be victims,

Parker Brugge, Best Buy’s director of government relations, said the company was happy to work with the Attorney General’s Office and its Bureau of Consumer Protection.

“We don’t want scams taken on our customers, so we share the same goal,” he said.

Jason Klipa, director of public affairs for Walmart in Pennsylvania and New York, said law enforcement authorities are their best resource in knowing when and how such scams are happening.

“We don’t want this to happen in our stores,” he said. “We understand because of the size and scope of Walmart, things are going to occur, but we want to try to minimize that as much as possible.”

Megan Guza is a Tribune-Review staff writer. You can contact Megan at 412-380-8519, mguza@tribweb.com or via Twitter @meganguzaTrib.