Complaints filed against company after empty gift cards turn up on store shelves

AUBURN, Mass. — Daniel Rechel said he was excited when his boss handed him $150 in gift cards for the holidays in 2020 and 2021.

But when he went to use the gift cards, Rechel said they were empty both times.

“Boom, a zero dollar balance,” Rechel said. I went to go use it again and [the cashier] said it was declined.”

The same thing happened to Atlanta business owner Todd Edlin, who said he buys thousands of dollars in American Express cards to give to his employees every year.

“I was shocked when I went to try to use one myself and I was told that there was not enough balance on it,” Edlin said.

Both Edlin and Rechel said the gift cards came in a sealed envelope.

‘They don’t have a scratch off pin number, and they don’t come through a middleman. They came to me in an envelope directly from American Express,” Edlin said.

The gift cards might say Vanilla, Visa, iTunes or American Express, but regardless of the name brand on the card, the vast majority come from InComm, an Atlanta-based company. Even though you don’t see the name “InComm” anywhere on the packaging, they’re the company responsible for processing the cards and the customer service.

It’s unclear how the empty gift cards are ending up on store shelves to be sold to consumers. InComm said it’s reviewing cases and working on “fraud prevention strategies,” but the company didn’t explain the source of the problem.

“Unfortunately, fraud is not limited to gift cards. The issue is escalating across the financial industry, and we’re constantly working alongside merchants and law enforcement to combat emerging threats. To prevent copycat behavior, we do not publicly disclose the tactics that fraudsters use, as is the industry standard,” InComm said in a statement.

California attorney Graham Lippsmith filed a class action lawsuit against InComm on behalf of Vanilla gift card uses. Lippsmith’s lawsuit alleges three possible scenarios: an inside job by a rogue InComm employee, a cyber breach of InComm security, or outside criminals who may have cracked InComm’s algorithm for creating card numbers.

“Corporate America truly does have issues with cyber-crime [whether it’s] inside people [or] outside people,” Lippsmith said. “If [gift card fraud is] happening thousands of times, tens of thousands of times, or millions of times, that’s what class action lawyers are here to try to prevent from happening.”

InComm said fraud prevention is a top priority and the company is investing in technology enhancements and new security techniques.

“If a customer reports an issue with a product we manage, we inform them of the information needed to conduct an investigation and the timeline required to complete it. We review every complaint on a case-by-case basis to devise an appropriate solution,” the company said.

Rechel said he got nowhere with the company when he tried numerous times to complain. At the time, he was too embarrassed to tell his employer that the gift cards were worthless. Today, Rechel said he’s sworn off gift cards forever.

“Don’t buy one,” he said. “Never buy one. Don’t do a prepaid gift card. If it doesn’t work, it’s not worth the hassle of trying to get a remedy from the company.”

This is a developing story. Check back for updates as more information becomes available.

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