There's a reason these scammers choose gift cards as their preferred way to get your money: gift cards have become the easiest way to move large amounts of money while minimizing the chances of getting caught.
Every other business that deals with the transfer of money (banks, for example) is expected to put strong measures in place to make sure that the money is traceable and that they're not helping criminals. Why shouldn't large companies like Target be held to a similar standard?
Moreover, the incentives here are very worrying. Yes this guy got scammed out of $3k, but Target also got $3k in revenue. Without some sort of penalty/punishment, Target is incentivized to do the bare minimum to minimize their PR exposure (which they can do by saying "we take this very seriously and have adopted some new policies" but not really acting on it) but to otherwise allow this to keep happening. As the prevalence of these gift card scams has skyrocketed, so have gift card sales for these large companies.
There's also an interesting sub-class of this scam that targets employees of certain size companies. Due to anti-bribery laws/rules/regulations gifts of cash to other companies are usually forbidden (and every employee with an expenditures line should generally be very aware of that), but non-cash redeemable gift cards are often still seen as fair "gifts" for various types of incentives/thanks/congratulations efforts. So gift card scams are sometimes even more effective for corporate employees, because corporations already abuse gift cards as a grease currency, and some corporate employees are very used to buying strange amounts of gift cards and giving them out in strange ways.
From what I understand, a retail store doesn’t make any profit selling gift cards for other stores.
The Safeway in this story didn’t make any money off of that $2k purchase of Target cards and it could’ve saved/boosted its reputation if it had some better protective measures in place. It also means that maybe people who would’ve spent money at Safeway now can’t because they’ve lost several thousand dollars.
> From what I understand, a retail store doesn’t make any profit selling gift cards for other stores.
That seems dubious, considering they dedicate precious shelf and display space to selling them. Accounting can get crazy in the real world, but clearly they have a motive to move these things. The cards are on the shelf because the cards make money for the store, somehow.
I know that I have a lot of gift cards that go unused for months, or never used at all. Probably a lot of profit in interest on holding all the money and keeping anything not claimed after a few years.
It might be true that they make no money from the sale itself, but those displays are likely from a third party that is paying for the shelf space.
If you do a search for something like "gift card distribution", there seems to be a bunch of marketing firms that you can pay to get gift cards made and put in stores.
Every other business that deals with the transfer of money (banks, for example) is expected to put strong measures in place to make sure that the money is traceable and that they're not helping criminals. Why shouldn't large companies like Target be held to a similar standard?
Moreover, the incentives here are very worrying. Yes this guy got scammed out of $3k, but Target also got $3k in revenue. Without some sort of penalty/punishment, Target is incentivized to do the bare minimum to minimize their PR exposure (which they can do by saying "we take this very seriously and have adopted some new policies" but not really acting on it) but to otherwise allow this to keep happening. As the prevalence of these gift card scams has skyrocketed, so have gift card sales for these large companies.