Redbox Scammers Steal Games By Using Bar Codes To Trick Kiosks

(STMW) -- Alex Martinez, who rents video games from Redbox at a Walgreens in Waukegan, has twice opened game cases that only had a piece of paper with a bar code inside, the Lake County News-Sun is reporting.

"I thought I was going to be charged for the full price of the game, but Redbox was pretty cool about everything," said Martinez, 39, who rents games for his 9-year-old son. "I just worry that if it happens two or three more times, that [Redbox] is going to think it's me stealing the games."

Bill Orechia found himself in a similar situation after renting a video game from a Redbox kiosk in Chicago's Old Town neighborhood. His copy of "Street Fighter" was empty.

"I got scared when I called [Redbox] because I thought I'd be charged the full $60 for the game," said Orechia, 27.

As it turns out, Orechia said, "It was routine business for them. The whole call took 10 minutes, and they even gave me codes for two free rentals."

That's because Orechia and Martinez fell victim to a scam that's been brewing since Redbox, based in Oakbrook Terrace, introduced game rentals in 2011.

Each Redbox disc has a bar code sticker that tracks customer credit card information and date of rental, among other things. But when unscrupulous users photocopy the bar code — or simply peel off the sticker and place back it in the case — the kiosks are duped into thinking it is the actual game.

For the company, it's hard to pinpoint who's to blame.

"If you're renter No. 1, then it's obvious," said Joel Resnik, vice president and general manager of video games at Redbox. "The problem is [the thefts] are not clear-cut."

Redbox declined to say what percentage of customers have been affected by the scam, and Resnik wouldn't elaborate on steps the company might be taking to combat this kind of theft. "If the problem was widespread it wouldn't be a profitable business for us — nothing is full profit — but we are constantly looking at new ways to address these challenges," he added.

Scammers might get away with a $60 video game as long as they're not greedy and stealing dozens of games at a time, but Resnik views the thefts as a cost of doing business. Redbox charges customers $2 a day for each video game rented.

"I draw this comparison to retail," Resnik said. "All retailers deal with shrink. There is always a risk to doing business. ... It has grown and more people are aware of the scam."

The awareness Resnik is referring to are various consumer complaints left on sites like Yelp!, Reddit and gaming forums such as Gamefaqs.

Redbox, which is operated by the publicly traded company Outerwall, closed Friday at $46.43 a share, up from roughly $45 a year ago. On Tuesday, the company hit a nine-month low after management lowered future revenue expectations. The company has rented more than 3 billion DVDs or video games since Redbox kiosks were introduced in 2002.

Meanwhile, the company recently increased the cost of renting DVDs by 20 cents, stating the "increase is a result of rising operational costs, including increased debit card fees."

"We are constantly looking at new ways to address these challenges and make sure people don't make a tremendous impact on our customer's experience," Resnik said. "That's what's really important to us — overall experience."

(Source: Sun-Times Media Wire © Chicago Sun-Times 2013. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)