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You now need to show ID when buying certain gift cards in Shakopee

The action is being taken to crack down on fraud.

Shoppers in Shakopee will now need to show identification when buying certain gift cards using your credit card.

In an ordinance approved by the city council last week, anyone using a credit card to buy American Express, MasterCard or Visa gift cards in a self-checkout lane will be asked for ID by a store employee, to ensure the ID matches the name on the credit card.

The step has been taken to crackdown on fraud involving third-party gift cards, which unlike store gift cards (ie. a Target gift card) can be used anywhere and for anything.

Speaking before the city council last week, per WCCO, Shakopee Police Chief Jeff Tate said that fraudsters often buy the third-party gift cards using cloned credit cards, and it's becoming an increasing issue in the city.

The gift cards are attractive to criminals, he said, because they can effectively be used as cash, the transactions are difficult to reverse, and they can maintain relative anonymity when using them.

The Star Tribune reports that Tate also said that someone tried 36 cloned credit cards in an attempt to buy a Visa gift card from a self-service checkout in Shakopee, and eventually was able to walk out with $1,000 on a card.

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Major retailers have been taking their own steps recently to curb gift card fraud, with Target, Walmart and Best Buy implementing restrictions on store-branded gift cards, limiting the amount you can put on them and no longer allowing them to be used to buy other gift cards, as PYMNTS.com reported.

It came after the Federal Trade Commission reported that scammers have increasingly been asked to be paid in gift cards for the same reasons as listed above: because they can be quickly used as cash, and because the transactions are anonymous and typically irreversible.

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