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.
It's obvious why gift cards are so popular with merchants. 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.
News source: MSNBC - Retail gift cards often unprotected