Be careful when buying gift cards on a display rack at a store. They could be a target for fraudsters.

“Scam artists don’t steal gift cards from the store or out of your pocket. Instead, they go to gift card racks and write down the numbers,” says the Ontario consumer ministry.

“After a few days, they call the toll-free customer service number to check the remaining balance on the card. Once they find the card has been activated, the thieves go online and start shopping with your card.”

I know that scammers can use gift cards without laying hands on them. Recently, I received complaints about a Visa Prepaid card and a Future Shop gift card.

In both cases, the customers were getting nowhere until they came to me.

Robert Cuneta received a gift of two Vanilla Prepaid Visa cards for $250 apiece. He found transactions he didn’t authorize on both cards.

One was used to renew a Canadian Automobile Association membership. The other was used for purchases at GoDaddy.com, a domain name registrar in Scottsdale, Ariz.

Cuneta called Visa Canada, which told him to call the merchants directly. The CAA charge was no problem, but he had to pay for a long-distance call to reverse the $55.62 charge to GoDaddy.

To make things worse, Visa added a $1.41 foreign exchange fee and wouldn’t reverse it.

When he wrote to me, he had been waiting two months for Visa to cancel the card with the $1.41 owing. He still hadn’t received a replacement.

The first thing I did was to contact the issuer of the Visa Prepaid Card, Peoples Trust Co. in Vancouver. (Its logo was so small that Cuneta hadn’t spotted it.)

Peoples notified its card partner, InComm Canada, in Richmond, B.C., which said the complaint had been mishandled.

“Our call centre in Salt Lake City should have provided you with a dispute package and initiated a dispute with the merchants,” Mohamed Bhimji, InComm’s customer support director, said.

“You should not have been told that you had to investigate the charges yourself and ask for them to be reversed.”

Robert Pain, Peoples’ senior vice-president of operations, said he didn’t know how Cuneta’s card details were obtained and used by an unauthorized person.

“Our experience of fraudulent use of our prepaid cards is very minimal and we do take it seriously when a case is brought to light,” Pain said.

“It seems that Mr. Cuneta did not get proper customer service information. We have taken all measures to ensure this situation does not reoccur for any of our clients.”

Cuneta was given two replacement cards, plus another $250 Prepaid Visa as compensation. He hopes that others can avoid the same runaround.

Gwen Fletcher bought a $200 Future Shop gift card for her son-in-law last June. He tried to use it to buy a DVD player in November, but found it had a zero balance.

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It seems the card had been used to buy a laptop last July – two weeks after she had purchased it and three days before she gave it to her son-in-law.

Fletcher had been waiting two months when she wrote to me. Within days, she was promised a replacement card and an extra $25 for her patience.

“I’m not sure that I will ever purchase a gift card from Future Shop, or that matter, do any sort of business with them,” she said.

Future Shop and Best Buy together sell about 26,000 gift cards a week, said spokeswoman Shannon Kidd.

“Very rarely do instances of compromise occur. Our loss prevention team takes these issues very seriously.”

Kidd recommends that purchasers keep receipts for any gift cards until they are redeemed. Unfortunately, not everyone who receives a gift card will also get a receipt.

So, here’s advice from the consumer ministry:

Buy from a person behind the counter, if you can, instead of from racks.

Opt for gift cards with a protective backing or a scratch-off PIN.

Look for tampering on the package or card before you buy.

I also think it’s a good thing to check the balance regularly after you activate the card. And if you’re the giver, tell the recipient to do the same thing.

Ellen Roseman writes about personal finance and consumer issues. You can reach her at eroseman@thestar.ca.