Are Apple gift cards safe to redeem?

For Apple, yes, but in the context of rules that apply across the board we should address the scaling issue. People who've had to deal with the filth of the Internet know how hard the problem is to solve, and not everyone has Apple money.

There's some truth to the incentives angle.

The program manager is responsible for retail placement and packaging. Their share of the revenue is small, but their liability for fraud is high.

Retailers (POS card sellers e.g. Safeway, as opposed to the card-branded merchant e.g. Apple), bear zero risk for fraud. Safeway can't police card validity -- if a customer brings the card to the cashier, they will scan it and the POS will attempt to activate it according to the program manager's backend rules. If it's a new unactivated card, it will get activated. The PM knows which serial numbers were distributed to each retailer, so they will not activate a card at a different retailer (and in some cases, a different location of the same retailer).

Moving the 100+ square feet of unactivated card displays to a retail cashier would destroy sales and impose a burden on retail staff that many can't handle, and none are incentivized to create a process for handling.

FWIW, program managers have gone through a few rounds of tamper-proof packaging upgrades. Obviously, their work is not done. But it is legitimately difficult to mass produce a tamper-proof package that is also consumer-friendly and not exorbitantly expensive.

If cost of packaging were no issue, or if customer friction could be disregarded, then the problem becomes more soluble. But we do not live in that world. And, in the extreme case, the criminals could just produce identical packaging including holograms etc. This is obviously within their capabilities, and if the cost of packaging can be absorbed in the multi-party legitimate sale chain, it will also be low enough for a counterfeiter.

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More importantly, I agree that _some_ regulation or law should prevent Apple|Google|Amazon|etc from parlaying a minor financial dispute into total lockdown of customer data! But the approach for that is not to inject the requirement into the problem of closed loop prepaid debit card management.

I think this is the only interesting problem here. The card management stuff is well-known and evolving, but also mature and ultimately just some accounting math of risk against cost.

Screwing up a customer's digital life should not be a consequence of the imperfect-by-design card management schemes. FinCEN should regulate the latter. CFPB should regulate the former. The agency doesn't matter of course, but those two groups have very different mandates, and right now merchants are letting the stronger FinCEN regulations dictate their consumer policies in ways they should not.

Breakage is between 10-20% on average, which is just insane.

However, a significant amount of the spending in gift card promotions is from the marketing budget of these companies. They use gift cards to keep you "engaged". They are used the way companies used to give out coupons basically.

Promotions rarely cost much. Keep in mind that even if breakage was zero, every dollar you spend at a company already has a profit margin baked in. Even if you only pay $9 for that $10 of spend at CompanyPlace, they are likely still making a profit. Promotions also have strong limits, so you can't really profit off of them as a consumer.

Except for one time. Once, IKEA ran a promotion that was "Spend $1000, get $100", and chose to set NO LIMITS. People were banking $10k worth of IKEA giftcards "for my future kitchen renovation" and IKEA found out their gift card fulfillment process was.... antiquated. Did you know old versions of Excel only allow for 65k rows of data?

>As for the fraud risk... do they even care?

We care. The brick and mortar store and Apple themselves don't really care, because they pay our company to take that risk, and our entire business is about preventing credit card fraud to reduce how much that risk costs.

>It would be so easy to make gift cards more secure. Modern technology can do a lot better than an alphanumeric code under a sticky cover.

What? What is your idea for better securing these cards? What "Tech" would help?

Note that I have no clue what apple is doing banning this account. We don't tend to ban victims of fraud or crime or scams, especially not for physical cards bought in a store because who knows what actually happened.

Some states have laws that gift cards never expire, like California. A lot of companies will just go with the most strict rule, rather than micromanaging state by state. The side effect of this is the company "keeps" the money that isn't spent. It may be earmarked at gift card money, but it will never be spent.

I am terrible at spending gift cards. I have some that are from 2007, 18 years old. Two years ago I decided I should check them all and actually spend them. Of the dozen or so cards (several of them for Apple), only 2 of them had an issue, all the others were still active with the original balance.

One of the issues was easily solved, it was a Visa gift card that had an expiration date... I reached out to the company and they issued a new card with an extended date. The other seemed to be so old that the underlying company was sold and pivoted, and changed systems (I assume multiple times) along the way. What was a card for a local restaurant chain now seemed dedicated to Dick's Sporting Goods... at least that's where the phone number went. I haven't yet tried going to the actual restaurant to see what happens.

This reminded me I did an awful job of actually spending them. I guess I need to try again.

lol I have another story regarding Apple gift cards.

Many years ago we had an iMac at the house as the shared desktop computer. After a few years, it started to have the signs that the harddisk is going to fail, and also we were mostly moved away from Apple's ecosystem, so we decided to trade it in and replace it with something else that's not from Apple.

Since we don't have anything immediate to buy from Apple, we traded it in with Apple gift cards.

Later, my partner needed to trade in an old iPad for a new one, so we used that gift card with credit card for the trade in. For that trade in, you first pay the full price with gift card+credit card, then they refund you the trade-in value after the trade-in is finalized.

The trade-in value of the old iPad is less than the value we paid via credit card, so we would reasonably assume that they would refund the total trade-in value to our credit card. But nope. They actually calculated the original gift card vs. credit card split ratio, and refunded according to that ratio.

A simplified example is say we paid $200 via gift card plus $300 via credit card for an $500 iPad, with trade-in value of $200 for the old iPad. Instead of refunding $200 to our credit card (so it's eventually $200 via gift card and $100 via credit card), they refunded us $120 to credit card and gave us another $80 gift card. So we have to find ways to spend that gift card again, and it cannot involve any trade-in (otherwise we're not going to be able to use it fully).