LA County Supervisor calls on retailers to protect consumers from gift card fraud

Los Angeles County Supervisor Janice Hahn called on retailers Thursday to step up and do more to protect consumers from ever-growing gift card fraud.

She told her story of recently falling victim to a gift card scam, where she was out $100 and her nephew was left with no gift.

"All of us are sick of these problems being pushed back to the consumer, I think it's up to the retailers to protect it and I think the retailers should put these gift cards behind their customer service desk, put them behind glass," Hahn said. "They could actually stop this tomorrow if they put these cards in a more secure location."    

The theft happens unbeknownst to the person buying the gift card, as scammers take the gift card's barcode off the card, replace it with another, put it back on the rack and wait for a customer to purchase it. 

"When the consumer goes to check out, the cashier is loading the consumer's funds to that barcode but it's not to the physical card the consumer is holding, it's to the card the scammers own," said Daniel Stiner, with the Better Business Bureau Sacramento.

Hahn said it was embarrassing for her, and for her nephew. She thought she was giving him a nice gift and at the time of checkout her nephew finds out his gift card has been wiped, there's no value to it. 

The thief gets the money, the retailer gets the money, and the consumer gets nothing. Hahn said she thinks there are more people getting ripped off by this scheme than is known. 

Just recently the Sacramento sheriff's office issued a warning about gift card fraud, as it arrested a gift card scamming suspect outside a Target store who had more than 200 cards on him with more than 5,000 Target and Apple gift cards inside his car.

The supervisor acknowledged government could step in and force regulations onto retailers, but said Thursday it would be nice if retailers stepped up to the plate and did the right thing.