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Shakopee now requires I.D. to buy third-party gift cards

May 18, 2019 08:44 PM

It’s graduation and wedding season, a time when many people are buying gift cards. Shakopee has a new law requiring a photo I.D. to purchase one.

The city law went into effect on Saturday, and it applies to Visa, Master Card, or American Express gift cards.

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“It’s the ones you can use anywhere and those are the ones criminals like to focus on,” said Detective Phil Sendelbach with the Shakopee Police Department.

He said criminals are using fraudulent credit cards to buy the gift cards.

“That’s a way that you can anonymously and easily transfer cash from the credit card,” Sendelbach said.

“We’ve had groups come up from out of state, from Florida, and they have hundreds of credit cards and they go around the metro area and they buy gift cards everywhere. As many as they can, to tunes of tens of thousands, hundreds of thousands of dollars.”

In March, Sendelbach said about $3,000 was charged to a Shakopee woman’s credit card, a case that included at least 20 other victims.

It’s not always easy for credit card companies to quickly catch the fraud.

“You can go online to the dark web and buy credit cards for people that specifically live in Shakopee and then you take the card to Shakopee and use it,” said Sendelbach.

He said requiring an I.D. forces clerks to verify the credit card belongs to the gift card purchaser. Customers will no longer be able to buy the gift cards in a self-checkout lane.

“This ordinance is a way of getting all of our retailers on the same page and putting a speed bump everywhere,” said Sendelbach.

The city saw a 17 percent increase in overall fraud in 2018.

The Police Department plans to track how well the law is working and give the City Council a report in six months.

The Minnesota Retailer’s Association has criticized the ordinance.

President Bruce Nustad released a statement stating that the changes required by the city are difficult for retailers to implement with the timeline given.

The statement comes amid retailers' pulling the gift cards from their shelves out of "concern" for employees as well as retailers' concerns over agreements with business partners, according to Nustad's statement.

"The reality is retailers were only given 11 days to implement changes, and that simply isn’t enough time to train each and every employee, change point of sale systems, and re-write operating procedures to ensure the proper checks and balances exist," Nustad said in the statement.

"The last thing a retailer wants is any employee mistakenly selling a regulated card, which would be a violation of the law and be punishable as a misdemeanor."

Nustad added that many businesses feel that the ordinance may lead customers to take their business to retailers outside of Shakopee. 

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Callan Gray

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