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Zero Balance: Customers say gift cards from resale website were drained

The Better Business Bureau took complaints from 48 states on one company that has since shut down

By: Rachel DePompa

Originally Published: March 1, 2021

(InvestigateTV) – John Crupi admits he likes to find a good deal, even when it comes to his indulgences, such as donuts and coffee. One way he saves on some of his habits is buying unused gift cards at a discount for places he likes to shop.

“I decided that if I could save roughly 12-15% on purchases that I’m making everyday, that sounds like a reasonable and good idea,” Crupi said.

Crupi found a company online re-selling other people’s unwanted gift cards.

Before the pandemic hit, he was going to Dunkin Donuts a lot so he bought about $265 in gift cards between September 2019 and January 2020 from a company called Cardpool.

He loaded the gift cards in his Dunkin Donuts app and spent some of the balance. When COVID hit, he stopped going. Then when he checked his balance in July, it said zero.

“When you look in hindsight, you feel like you were foolish. Roughly to save $35 on all these cards together, I lost about $226 dollars in the process,” Crupi said.

Crupi can laugh now, but he said he’s been trying to get his money back from Cardpool for months. He can track the purchases through the shop’s app. Crupi lives in Virginia, and the gift cards were used in four other states. Someone spent $51 at a Dunkin Donuts in New York and another $50 in South Carolina. There are multiple purchases in Maryland and Massachusetts.

“None of those I had been to for sure, especially during COVID times because we weren’t really traveling,” Crupi said.

Crupi showed InvestigateTV an email in which Cardpool said it was unable to approve a refund because it shows all balances were intact when delivered. The company told him to double check his records to make sure he didn’t use them.

In December, the Better Business Bureau sent out a warning about Cardpool after a rash of complaints. The organization received more than 2,100 in three years.

“Suddenly, there was, because of the holidays, a huge bump up in Cardpool complaints. So we just had to put that out to the nation. We researched it, offered them opportunities to fix it, didn’t get done. We informed the country,” said Barry Moore, with the Better Business Bureau.

The complaints to the BBB came from 48 states and the District of Columbia.

For example, a man in New York wrote, “Bought a gift card from them. I didn’t use it for months due to the pandemic. But when i went to use it… it had a zero balance.”

When he said he called Best Buy, they told it him the gift card was used by someone in Delaware.

As InvestigateTV was looking into the complaints and the company, the company shut down, posting on its website: “Cardpool Is No Longer Buying or Selling Gift Cards. We tried our best to outlast the pandemic, but unfortunately, we couldn’t make it to the end.”

Cameron D’Ambrosi knows a lot about gift card transactions through his work with One World Identity, a strategy and research firm focused on digital identity. He has an idea for what may have happened.

“How fraudsters might likely be able to drain a gift card after you have it in your possession is before they sold it on this platform, they scratched off that scratcher piece and took down the secret code,” he said.

Most gift cards have a four-digit number hidden under a scratch off coating. With the secret pin and the string of identifying numbers from the front of the card, anyone can use it.

“Keep your wits about you. The old saying, if something is too good to be true, it probably is,” D’Ambrosi said. “There is really limited recourse that a consumer has in that case because of the fact that gift cards are not regulated like credit cards or like a prepaid debt card is.”

The bottom line: Gift cards are essentially like cash.

The Federal Trade Commission received nearly a 100,000 complaints about gift cards in 2020, reporting consumer losses of 124 million.
Some things to keep in mind:

  • The store the gift card is for likely can’t do much because you didn’t buy it directly from them.
  • Research any third-party gift card sellers. See if they have complaints.
  • See if you can change the pin, once you upload the card to a store’s app. That gives you an added layer of protection.
  • “Use a credit card whenever possible if you’re buying gift cards frankly because your credit card company gives you a little bit of support to try to recoup a refund,” Moore with the BBB said.

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