Lettuce Entertain You gift certificates: is fraud common?

So I decided to buy an e gift certificate at LEY for my son, and after filling in all the online forms, I thought he'd have it in minutes. But:
1. Three hours later I get an email that I have to call a number to provide vertification information. They say it's for all first time purchases.
2. I call, can't get through, and have to leave a message.
3. Two hours later, having not heard back, I call again and get through.
4. To complete the purchase, in addition to providing name and the last four digits on the credit card, I have to: give the customer service number on the back, my home address, the county I live in, the nearest cross street to my street, and, get this, identify a nearby landmark. I may have forgotten a question or two. I also "verify" the email address I want it sent to.
5. With this, 6 or 7 hours after my purchase, the gift card will go through.

The people you speak with are not LEY; it is some third-party service they hire. There was nothing unique to my transaction that raised questions.

This is obviously poor customer relations, but the quesiton is, how much fraud do they run into? I assume LEY would prefer to keep it simple. I've purchased thousands of dollars of online items and never once had to run this gauntlet. So are fraudulent purchases that common?

Now I feel better.

Jonah

I would think fraud is common with any online gift card purchase, not just LEYE. Electronic gift cards would be more susceptible to fraud (purchased with stolen credit card) than other online purchases because the item can be sold for close to the purchase price and the item need not be received at a physical address.

That being said, the process you went through is insane. I wouldn't have answered the cross street / landmark question. All the other information requested is contained on the stripe on your card.

-Matt

I suppose gift certificates are easy to resell, but name a landmark? What next, submit a blood sample? I often buy my niece itunes gift cards, which you think would be a lot higher on the list for fraud than LEYE certificates, and the security code and zipcode are enough for them. For a while, I was on some kind of special security list with my bank that made almost every online transaction fail until the vendor called me in person, but then the transaction would go through. I think that is because the purchase is then considered a phone purchase rather than an online purchase. This still happens if I use a vendor from which I have never purchased anything, but that is the bank's policy, not the vendor's.

milz50 wrote:I wouldn't have answered the cross street / landmark question.

Oh, I would've answered it. In fact, I would've had a field day with it.

"Well, let's see, there's the statue of Johann Wolfgang von Goethe, Chilam Balam that Chuy from Top Chef used to run, the original Intelligentsia café, the white leather loveseat that's been sitting in the alley by our place since we moved here, the 'Ivanhoe' Binny's that always has a different reason for being out of Elmer T. Lee, the weird bronze statues around the St. Joe's office building entrance, the Friar Tuck...."

So in fairness to LYE, I sent an email asking some questions about this. I got a very prompt call, though not from LYE, but from a representative of Cashtel, the company the processes credit card transactions for LYE. Here's the gist of what he said:
1. They do not do this "security check" for most transactions.
2. At first he tried to suggest that it was a random selection. Then he indicated they have some kind of fraud score that triggers this inquiry.
3. I think I triggered it in two regards. The gift card was for a larger amount, and I mistakenly sent it to "Eli" on a mother's day card.
4. He tried to argue that they are helping LYE customers becuase they catch fraudulent uses of credit cards.
5. When I asked why no one in the universe, including giants like Amazon, do this, he had no answer.
6. When I noted that I never have to pay for bogus transactions as credit card companies cover you for this, he had no answer.

LYE has farmed out their credit card processing, which I suppose is not unusual. Whether LYE specifies this silly fraud protocal, or whether this Cashtel outfit does it on their own I can't tell.
I appreciated the prompt call, although I was less impressed when I found out it was not LYE that called. LEY viewed this as not their issue.

Bottom line: If you purchase LYE gift cards, youu probably won't encounter this problem, but some will.

You could always go to a LEYE restaurnt and purchase them in person with no questions asked.

While you don't pay for credit card fraud, the vendor does - not Visa/MC/Amex etc. so it's in their best interest to reduce fraud. The CCV number on the back and your billing zip code should have been enough though.

Gift certs sent to a different address than the bill address are among the highest risk items, but I have to say, this was silly.

Two further comments:
1. After getting the call from the credit card service, LYE directly called me. I was gone from the office, so I haven't spoken to them to hear what they have to say. They have clearly made a big effort to apologize.
2. As I think about this, while I'm not sure why they can't just take their fraud losses (Amazon apparently can live with them), if they had done two things differently I'd be fine:
a. Get the email to me saying they need a call right away, not 3 hours later. I expect an e card to go right away.
b. Here's the biggie: be honest. The email said something about first time purchasers having to call. If, instead, they said: "We are concerned your card may have been used for a purchase you did not make, please call us to confirm you made the purchase," I'd have been fine with the process. I can understand someone being concerned about fraud: just tell me that, and take care of it right away.

Jonah