Money Monday: These 5 Gift Card Scams Could Cost You Big

BY: - 28 Nov '16 | Money

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Stumped for a gift idea? Don’t know what to get your co-worker or relative? Faced with this dilemma, it’s easy to go with the old standby—a gift card. In fact, 57 percent of shoppers plan to purchase a gift card this Christmas season. But before you buy a gift card, be aware of potential pitfalls, some of which could cost you serious cash.

Know who you’re shopping for

In a recent Bank Rate survey, only 27 percent of respondents claimed that they would rather receive a gift card than an actual gift during the holiday. Twenty-one percent had no preference either way. If you do intend to give gift cards, try to make them personal. Take the time to find out where the recipient likes to shop or eat. There’s nothing worse than a vegetarian receiving a gift card to a steak house.

Additionally, try to match the dollar amount of the gift card to the average cost of merchandise in the store. According to GiftCards.com, 72 percent of gift card holders will spend more than the value of their card. Giving a $10 dollar gift card for Starbucks may be appropriate, but a $10 gift card to Macy’s may force the recipient to shell out additional money in order to make a decent purchase.

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Watch out for these common gift card scams

With more than $100 billion spent on give cards annually, it’s no wonder that thieves increasingly target the gift card market. Here are some scams to look out for:

1. Tampered cards
In a common scam, crooks copy the gift card numbers and pins of cards located in gift card displays. With this information in hand, they continually check to see if one of these cards is purchased and activated. When a card is purchased, the thief then uses the gift card number online to drain the card, leaving the rightful purchaser with a useless piece of plastic.

Protect yourself by always looking to see if the gift card you purchase has been tampered with. Check to see if the PIN number has been revealed on the card. Better yet, never purchase gift cards located in card displays that are easily accessible to the public.

2. Switched cards
Sometimes dishonest cashiers switch a blank card for the gift card you just purchased. You go home with a worthless card, while the cashier walks away with your activated gift card.

Protect yourself by asking the cashier to check the balance of the card once you receive it back in your hand. Additionally, check to make sure the gift card number listed on the activation receipt actually matches the number on your gift card.

3. Resold gift cards
Everyone loves a deal, but be careful buying discounted gift cards from reseller websites, card auction sites or Ebay. Cards on these sites may be stolen or counterfeit.

Protect yourself by only buying a card from a gift card reseller with a good reputation, and preferably from a website that offers an active customer service line and money-back guarantees.

4. 3rd-party merchant
Merchants may fight over who is responsible when gift card fraud occurs. The Los Angeles Times recently recounted the story of a couple who purchased and activated a $1,000 Nordstrom gift card at a CVS store. When the recipient went to use the card, it had a zero balance. Only after a lot of hassle and much haggling between CVS and Nordstrom was the couple eventually able to get their $1,000 back.

You can protect yourself by purchasing a gift card directly from the merchant instead of purchasing at a third party merchant. Buy your Nordstrom gift card, for instance, at Nordstrom instead of CVS. This allows you to obtain quicker resolution if any problems arise.

5. Internet scammers
The Federal Trade Commission is warning about a prevalent scam, in which con artists impersonating the IRS or other government entities demand payment in iTunes, Amazon or other gift cards. If you refuse, the thieves threaten you with arrest or use other strong arm tactics.

Alternatively, the FTC warns that scammers might pose as family members or acquaintances who need help fast, asking you to place money on a gift card and share the code with them. Many retailers such as Apple and CVS are also actively warning people against the scam. You can protect yourself by not replying to that email. If you received a suspicious email from a friend or acquaintance, contact them directly by phone and let them know about the potential hack of their email account.

Remember government services and public utilities will never ask you for payment in gift cards. The FTC asks that if you get targeted by such a scam that you report it to the FTC at the ftc.gov.

Gift cards can be a great gift for the right person. Be careful, however, and protect yourself from common gift card scams so that you can enjoy a merry holiday season.

BMWK, the holidays are full of scammers trying to get over. What other ways should shoppers be careful?

About the author

Alonzo Peters wrote 298 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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Money Monday: 5 Questions About 2016 That Will Help You Prosper in 2017

BY: - 12 Dec '16 | Money

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As the year roars to a close, it’s only natural to think about what lies ahead in 2017. Before you look forward, however, consider taking time to reflect on the year that was. Answering a few simple questions about 2016 could put you on the right track to a prosperous 2017.

What did you learn from 2016?

Celebrate your victories. That’s right, pat yourself on the back for all you did accomplish financially in 2016. Gloat. Make a list. Maybe you set up a 401K account at work. Perhaps you started following a monthly budget or cut down on frivolous spending. Whatever the financial win, take the opportunity to celebrate it.

At the same time, be willing to learn from your mistakes. Of course, we’re all afraid to admit our mistakes. They seem like sign posts, pointing directly to our weaknesses. But, instead of fearing mistakes, learn to appreciate them, for your mistakes are the exact learning opportunities that will make you more successful in the future. What were your biggest financial blunders in 2016? How will the lessons from these mistakes help you in 2017?

Where are you now?

Take stock of your current financial situation. Before you move forward you must understand where you stand now. Exactly how much debt do you have? How much are you bringing home? Most importantly, calculate your net worth.

Your net worth is the sum of all of your assets minus the sum of all your debts. Assets are things of value like your home, cars and saving accounts. Debt is everything you owe, whether it be your mortgage, credit card debt or student loans.

Your net worth is the score card you’ll use to monitor your financial progress. Your goal in 2017 will be to make moves that increase your net worth.

Where do want to be?

What does financial freedom mean to you? Do you want the freedom of having savings in the bank, money in your retirement account or the ability to take a vacation whenever you like? Whatever your vision, you must write it down. You must turn your vision into a goal with a real deadline, otherwise your vision becomes nothing more than a dream. I suggest turning each one of your financial desires into a SMART goalSpecific  Measurable  Authentic Realistic  Time limited.

Don’t just decide that you want a new job that pays more. Instead, your SMART financial goal should state: I will obtain a job in my field of work that pays me a minimum of $70,000 a year; I will find this job within the next eight months.

Instead of deciding that you will buy a home in the future, turn your desire into a SMART goal:
I will purchase a home located in a good school district within a 40 minute commute of my job. The purchase price will be between $250,000 to $350,000, and I will save $50,000 for a down payment. I will purchase my home within three years.

What are you willing to give up?

We often have a clear picture of what we desire, but we never take a close look at what we’re willing to give up to get it. Perhaps you want to start your own business, but you spend two to three hours a night using Facebook or watching Real Housewives of Atlanta. Until you decide to give up something less valuable to you (using Facebook or watching television) to obtain something more valuable to you (time to start your own business), you’ll always be in the same place. Take the time to decide what you’re willing to give up to obtain what you truly desire.

What is keeping you stuck?

In any potential endeavor, there is always one sticking point—one hurdle that if we overcame would make achieving our goal attainable. Perhaps you would like to start your own business but have been procrastinating getting a business plan together.

Maybe you’d like to start investing but don’t know the difference between a stock, IRA or 403b. You’d like to get a raise but still fear taking the exam for the certification that would lead to your promotion. Think hard. Identify the one thing that is holding you back, and decide to attack it with everything you have in the new year.

Use your reflections of the past year to springboard your efforts in the new year. Most importantly, believe in yourself. Give yourself permission to make 2017 your best financial year ever.

BMWK, what do you plan to do to make 2017 your best financial year yet?

About the author

Alonzo Peters wrote 298 articles on this blog.

Alonzo Peters is founder of MochaMoney.com, a personal finance website dedicated to helping Black America achieve financial independence.

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