During the holiday season, one of the most common gifts that you'll receive is a plastic gift card to a major retailer, a restaurant, or even to a gas station. When you go to check out, you will likely do the same things that you do with a traditional credit card: swipe the card's magnetic strip and (maybe) sign for your purchase.
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However, in a world where most of us have already switched over to chip cards, this could seem strange.
Many credit card companies have made a big show out of switching over to the chip instead of using the older magnetic strip action. Anyone who works retail knows that changing the machines has been a painstaking process so that everyone can use their new cards.
However, chip cards are generally considered to be harder to counterfeit because the chip's security code changes after each and every transaction. This helps to cut down on in-store transaction fraud, even if it won't help when you shop online.
However, gift cards aren't protected by this technology. Instead, they will have that stripe technology that so many are worried about. And it probably isn't going to change anytime soon.
“No one will bother issuing EMV gift cards,” Avivah Litan, a fraud analyst with consultancy Gartner said to the St. Louis Dispatch. “(That would) eat up profits.”
Still, gift card fraud is a big concern for many retailers. Gift cards make up around $125 billion in a year. There are many instances of counterfeit gift cards being sold every year.
So what can normal shoppers do?
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The first thing you should make sure is that you purchase gift cards at the retail location where they are to be used. Keep the receipt and give it to the person - more retailers will give you a gift receipt for the gift card. It would also be a good idea to ensure that the person who receives the gift card registers it right away.