Missouri — Sales of gift cards are predicted to hit $160 billion dollars this year.
So, you would think stores would work hard to make sure shoppers keep buying them.
But one of the biggest retailers in the world has run into a problem with the cards it sells in its own name.
Walmart, was just hit with a class action lawsuit, over fraud connected with its cards.
And it seems some customers who purchased them are doing anything but “Saving Money and Living Better” like Walmart’s slogan promises.
"They should have taken care of this a long time ago," says long-time customer Charlie Pettit.
Pettit, who called us from Colorado said, when he returned a laptop from Walmart to the store, they would only credit him with a $550 gift card.
When he tried to sell that card to someone on Craigslist, he says the would-be buyer told him,
"There was no money on the card. I said, ‘I just got $550 dollars on it yesterday’. And he said, someone got to you then."
Pettit says he called Walmart, but claims they told him it wasn’t their problem.
And on Walmart’s website it says, customers are responsible for keeping their gift card password safe.
Problem is, the company is accused of not keeping the cards safe before they're sold.
Attorney Craig Heidemann, who filed a class action lawsuit against the company in Missouri, where his client lost $50 dollars, explains how the fraud happens.
"While the gift cards are on the shelves, somebody would come in, scrape off the tamper strip on the back and record the secret information. So that before the gift cards are sold, the numbers are obtained by hackers. And when the money is put on card they’re able to be the first ones to suck off money on the card online, by making fraudulent purchases.”
Thieves can also simply snap a photo of the card number, and once the card is activated, go online and take out the money.
The lawsuit alleges that:
-The fraudulent practice is common and known to Walmart.
-Associates are not properly trained to inspect gift cards for tampering.
-The company refused to replenish the balance on cards or refund money.
That’s despite the fact, Heidemann says, other companies protect their customers.
"Visa, Mastercard, American Express, when they sell their prepaid gift cards at Walmart, you’ll notice they’re inside a wrapped packaging that would have to be ripped opened and the card would have to be taken out in order to steal the secret data from it.”
As angry as Pettit is with Walmart, the bigger problem is the financial hardship that he’s now dealing with.
"My wife and I are livingon her $700 dollar disability check. $700 dollars doesn't go far,” he tells us.
Statement from Walmart:
“We take any fraud in connection with our gift cards seriously and have measures designed to help guard against these types of crimes. Like many retailers, we are continuing to look at this issue, the controls we have in place and how we can enhance our gift card program to better protect customers. We are reviewing the complaint and will respond appropriately with the court.”
For more information on how to protect yourself from gift card scams, click here.