A month back I bought a $50 Fandango gift card on eBay for $25 to go watch Avatar in 3d with my friends. This amounts to essentially a 50% discount and with movie ticket prices hovering around $13-$15 it seemed like a great deal. I received the gift code electronically via e-mail instantly after paying through PayPal. I went to Fandango.com and had no problems redeeming the code and picking up the tickets at the theater.
In fact, there was no problem using the gift certificate at all. Overall, I had a pretty good buying experience. However the problem comes in when the ethical side of me researches why the gift cards are so cheap. Generally legitimate gift card sale prices are pretty close to face value (and sometimes over if a buyer is getting a considerable cashback bonus or has a coupon).
It turns out that this is a very common scam in which the sellers buy online gift cards which require no physical delivery with stolen credit cards and then re-sell them on eBay for a fraction of the cost. Generally if you don’t use the gift card you buy within a certain time frame the gift card will be invalidated once the fraud is detected. You’ll be out of luck in recovering your funds and chances are the seller is gone too.
It turns out a number of other experiences all over the web tend to be with foreign sellers but I noticed that the seller with whom I had my transaction was listed on eBay as operating out of California. There are several possibilities here:
- The seller is perpetrating the fraud themselves while based outside the US and is putting false location information on eBay.
- The seller has buying the gift certificate codes from a foreign seller and may or may not believe he/she is selling a legitimate product.
- The seller is in the country and is perpetrating the fraud themselves.
I’m going to guess that the seller is being duped into re-selling the gift certificates from a foreign associate who’s using stolen credit cards to obtain them. This is one of the reasons why sometimes when law enforcement investigates cases of stolen credit cards being used to buy goods the trail often ends up cold or to a jurisdiction out of reach.
I’ve been thinking about this post and wondering who the winners and losers are in this scam. I sincerely doubt that the sellers are really being duped; I think they know exactly what they are selling, and have a pretty good idea of where they are coming from.
I recently wrote about another scam that has been perpetrated mainly on eBay: Fake USB Flash Drives. This all makes me kinda cautious about buying items on eBay.
I guess that it means you need to be cautious whenever a relatively new seller lists a lot of similar items that they are looking to sell in a hurry. When you take a second look, that seller may be long gone.