Online Shoppers Warned Of Gift Card Scam

BOSTON (CBS) - As the busy shopping season kicks into gear, the Federal Trade Commission is warning online shoppers to be on the lookout for a scam.

Daniel Alouie was in the market for a particular grill. After doing a Google search, he thought he found a good deal on www.avadars.com. This website had the best price and seemingly good reviews. "Everyone said positive things," added Alouie.

When he went to place his order, there was an unusual request from the company. He was told they could not accept a credit card. Instead, they wanted him to get a gift card from Amazon. He was told it would save him the expense of the sales tax.

Because the price was good, Alouie thought it was worth the effort of getting an Amazon E-Card which gives the buyer the option of sending Amazon credit to anyone in the world.

After sending the information to www.avadars.com, he never heard back. "I wrote 15-20 emails, and they never answered."

Soon thereafter, the website went dark.

David Newman of the Federal Trade Commission expects to see a lot of these types of scams over the holiday shopping season.

Crooks create a fake website and demand untraceable gift cards as payments. They entice shoppers with the promise of deep discounts, often on electronics.

The FTC has even issued a warning about paying online shopping bills with Amazon gift cards. "It's essentially mailing them an envelope full of money," said Newman.

When Alouie reached out to Amazon, he says the company refused to put a freeze on the gift card, or refund him the balance on the card.

Alouie paid for his gift card with a credit card, so he convinced his bank to refund the money that Amazon had refused to return.

Amazon has now placed a hold on his account until he pays them back. Alouie described his experience as "more than upsetting."

When shopping online, consumer experts say buying with a credit card gives you the most protection.

In a response to this case, Amazon said it does have the ability to put a stop on a gift card transaction, but wouldn't provide specifics on this situation.