Card Thieves Target Supermarkets

MICHAEL GARRY

WASHINGTON — Supermarkets and other retailers that serve as “gift card marts” are a target for criminals who buy gift cards with stolen credit cards, according to Joseph LaRocca, vice president of loss prevention for the National Retail Federation here.

“They take stolen credit cards and go to one location and buy a diverse array of gift cards to be sold online or pawned,” said LaRocca, speaking to reporters during a recent conference call on holiday-season loss prevention issues. By purchasing gift cards for different retail companies at one time, “they spread out the risk,” he added.

LaRocca noted that consumers should be discouraged from buying gift cards from online auction sites, where cards obtained fraudulently are often made available.

Supermarkets have increasingly become a third-party seller of gift cards for a wide variety of retail outlets. Last month, Blackhawk Network, Pleasanton, Calif., a subsidiary of Safeway that supplies gift cards to a number of food retailers nationally, said it would roll out its third-party gift card program at stores operated by Kroger in time for the holidays.

LaRocca said some supermarkets are responding to the growing risk of gift card theft at their stores by requiring that gift card purchases be made with cash or debit cards and not credit cards.

In general, retailers have been using secure packaging and displays to minimize the risk of gift card theft, he said. Gift cards are also being equipped with PIN numbers and scratch-off codes to prevent fraud, and are being linked to centralized fraud-monitoring services.

In the conference call, held Dec. 7, LaRocca also addressed organized retail crime (ORC), which accounts for between $15 billion and $30 billion in retail losses annually, according to the FBI.

In April, NRF launched the Law Enforcement Retail Partnership Network (LERPnet), a nationwide crime database designed to unite law enforcement agencies and retailers in the fight against ORC. It allows retailers to share information with each other and with law enforcement. LERPnet now has 52 participating retail companies, accounting for 80,000 stores, said LaRocca.

Publix Super Markets, Lakeland, Fla., is one of the latest food retailers to join LERPnet, according to LaRocca. Other food retailers in the program include Albertsons, Wal-Mart Stores, Safeway and Target. “We're still collecting data, and so far we have 10,000 incidents recorded in LERPnet,” he said.