Recording transactions in a journal5/3/2023 ![]() The fraudster just sells the gift cards, and the retailer has no idea it is redeeming fraudulently acquired gift cards. Also, there are companies such as and that buy and resell gift cards. This type of fraud causes problems for the retailer, for the retailer’s reputation is damaged through the implementation of poor internal controls.ĭoes the fraudster use the fraudulently acquired gift cards? No, there is an entire market for selling gift cards on Craigslist, just go look and see how easy it is to buy discounted gift cards on Craigslist. ![]() In another gift card fraud, the individual’s credit card is stolen and used to buy physical gift cards from a retailer. The customer’s bank account will be drained, and the customer will be upset. The fraudster contacts the retailer posing as the individual, and the retailer creates an in-store gift card redemption code, and the fraudster or his or her accomplice will go to the store posing as the individual and buy physical gift cards with the redemption code. The individual uses the same password for the reloadable gift card as his or her email account, and the fraudster will see emails about the gift card. Accountants can help their organization limit gift card fraud by reviewing their company’s internal controls over the gift card process.Ī simple explanation of this fraud is that a fraudster will gain access to an individual’s email account through phishing or by other means, such as a fraudster putting a key logger on a public computer or in a corrupted public Wi-Fi. This is a real problem, and an internal control to reduce this type of fraud is to use a double verification system for the transfer of money from a bank account to reloadable gift card account. A fraudster can hack into autoloading gift cards and drain a customer’s bank account by buying new, physical gift cards through the autoloading gift card account. One of the problems with gift cards is that fraudsters are using the retailer’s weak internal controls to defraud the retailer’s customers. Gift cards are a great way for a company to presell its products and to create cash flow. Turning Hacked Gift Card Accounts into Cash
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