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Buying Gift Cards from Auction Sites Could be a Gamble

Buying Gift Cards from Auction Sites Could be a Gamble

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(NBC News) -- You could be gambling this holiday season if you buy a gift card from an Internet auction site.

Liz Crenshaw shows us how a gift card scheme called "e-fencing" scams consumers.

Last year consumers purchased more than 19-billion dollars worth of Gift cards. Most were legitimate. But some consumers bought gift cards from internet auction sites. Joe larocca, Vice President of Loss Prevention at the National Retail Federation warns; that's a gamble.

Joe LaRocca, National Retail Federation: "Well, here we have one seller that's listing a Bed, Bath and Beyond gift card, a Talbot's gift card, and a Victoria's Secret gift card."

Liz: "At pretty steep savings."

Liz: " And the fact that you've got one seller selling three, this makes you uncomfortable?"

Joe LaRocca, National Retail Federation: "This makes me uncomfortable."

The gamble usually starts with stolen credit cards or stolen merchandise that thieves quickly convert into gift cards. Or gift cards are cloned into phony gift cards with little or no value. In either case, thieves auction off these gift cards online, to unsuspecting customers looking for a bargain."

Joe LaRocca, National Retail Federation: "Bed bath and beyond, a $246 gift card for $192. Talbot's $326 down to $265. And Victoria's Secret $173 down to $135. Significant savings. You can see why people are bidding, and they are bidding."

But bad things can happen when gift cards are e-fenced.

Joe LaRocca, National Retail Federation: "Well, here we have a Lowe's gift card for $256 being sold for $200."

Liz: "Hey I'm saving 50 bucks again."

Joe LaRocca, National Retail Federation: "Or you're helping a criminal that's stolen somebody's credit card get away with the crime of make money for the crime."

The second gamble, you go to the store and the auctioned gift card you bought Online is bogus or has little or no value.

Joe LaRocca, National Retail Federation: "A couple of years ago, several retailers did a survey. About 70% of the gift cards that they acquired over the internet were in fact obtained with fraudulent tender or didn't have the value that they claimed to have."

The national retail federation says consumers should only purchase gift cards from legitimate retailers where receipts are given along with the purchase. Joe Larocca adds that gift card gambling deals online don't just pass the smell test.

Joe LaRocca, National Retail Federation: "Why would somebody sell a $100 gift card for $50 or for $75. That's like buying a $20 bill for a $10 boll. We just don't do that."

eBAY policies say no seller can sell more than one gift card at a time. But we had no trouble finding sellers offering multiple gift cards. That's a red flag, .unless you want to gift card gamble.

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