Get Started

Learn more about Credit Cards, Travel Programs, Deals, and more.

Update On The Kroger VGC Fraud/Elegant Scam Situation

This post may contain affiliate links - Advertiser Disclosure. As an Amazon Associate, we earn from qualifying purchases.
Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers. Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities. Links in this post may provide us with a commission.

Update On The Kroger VGC Fraud/Elegant Scam

Update On The Kroger VGC Fraud/Elegant Scam Situation

I wanted to give everyone a quick update on Joe’s situation with dealing with the fraudulent cards. I covered the whole scenario in more detail a month ago but I will give you a quick overview.

Brief History of the Situation

There are people placing bar codes inside of Visa gift card packages at Kroger stores.  My belief is that it is someone who works at the gift card company but I have no proof of that.  They place paper bar codes in where the gift cards are scanned to be activated.  This bar code activates a card they have themselves and not the one in the package.

This makes it difficult to dispute the charge with Kroger or the gift card provider because they show it being properly activated.  Even though the activation is to a card other than the one in the package.

RELATED: Does Safeway Have A Rampant Gift Card Fraud Issue?

Update On The Kroger VGC Fraud/Elegant ScamJoe’s Dilemma

The employees at the Kroger store admitted that they were aware of the issue but said it was store policy not to refund gift card purchases.  They sold a fraudulent product and they were aware of the issue but essentially said take a hike.  Instead of taking responsibility for not properly training employees on the issue they left it at Joe’s feet.

The gift card vendor was not any more help since they showed a card properly activated.  Joe probably could have tried to get replacement cards issued.  The problem was his purchases were from 3 different gift card vendors and he didn’t want to attack that beast head on.

Joe’s Resolution

I told you in the original write up that he was going to file a charge back with Chase.  Most people thought this would not work.  I figured that it may because of the information he had on hand and he was able to provide a narrative of what happened.  Joe just reached out to me to confirm that Chase awarded him the charge back and he was credited for the purchases.

Final Thoughts

I am glad Joe was made whole on these purchases.  And I think it was a fair move on Chase’s part to uphold the charge back.  I am not sure if Kroger agreed to it as well or if Chase just told them tough luck.  There is not telling if this would work every time and I suspect it is very YMMV.  But it is good to know that filing a charge back is an option should you come across the same issue.

Disclosure: Miles to Memories has partnered with CardRatings for our coverage of credit card products. Miles to Memories and CardRatings may receive a commission from card issuers.

Lower Spend - Chase Ink Business Preferred® 100K!

Chase Ink Business Preferred® is a powerful card that earns 3X Ultimate Rewards points in a broad range of business categories on the first $150K in spend per year. Right now earn 100K Chase Ultimate Rewards points after $15K $8K spend in the first 3 months with a $95 annual fee.

Learn more about this card and its features!

Opinions, reviews, analyses & recommendations are the author’s alone, and have not been reviewed, endorsed or approved by any of these entities.
Mark Ostermann
Mark Ostermann
Mark Ostermann is a father, husband and miles/points fanatic. He left the corporate world after starting a family in order to be a stay at home dad. Mark is constantly looking at ways to save money and stay within budget while also taking awesome vacations with his family. When he isn't caring for his family or taking a weekend trip, Mark is working towards his goal of visiting every Major League Baseball ballpark.

Responses are not provided or commissioned by the bank advertiser. Responses have not been reviewed, approved or otherwise endorsed by the bank advertiser. It is not the bank advertiser's responsibility to ensure all posts and/or questions are answered.


  1. Hi everyone, I filed a class action lawsuit against Ralphs and Kroger related to gift card issues discussed here entitled Hiradate v. Ralphs Grocery Company and the Kroger Company, which is currently pending in federal district court in Los Angeles. You can find information about it online and also feel free to reach out about it. Let me know if there are any questions.

  2. I got hit with this on 2 $500’s this afternoon from a single Kroger store.. Went back to store for refund (no luck). Went to pegs and pulled 2 more off the shelf with same fraud technique. Cashier said second complaint at that store today. Will try AMEX chargeback when charge posts.

    • Sorry to hear that – hopefully you are able to get it resolved with Amex easily. Thanks for the DP though

  3. I came home with a $500 VGC from a CVS in the Bay Area today. Opened the packaging and a small strip of photo paper fell out. My heart sank. Having followed this story I knew immediately what was going on (thanks for the heads up).

    Initiated my charge back against Citi right away, though the charge hasn’t posted so I’d have to wait. Anything else I should/can do? Does it make any sense to dispute directly with the CVS store manager?

    • Note – the strip of paper was photo paper, e.g. it is smooth with the bar code having a slightly elevated texture, so it feels on the hand similarly to the actual card (not that I tried this in the store). Also both ends of the photo paper was lightly glued to the inside of the packaging so it wouldn’t shift when the finger rubs on it. The original packaging also did not appear to have been tempered with from the outside, with no bending or ripping. This certainly is version 2.0 of the same fraud… 🙁

  4. I concur that U.S. Bank is useless when it comes to taking the consumer’s side with gift card problems via chargeback. They never even called or sent a letter requesting more information after I called in to open a dispute. As soon as the merchant faxed the copy of the receipt and their claim the card was activated and had no history of issues, the reversed the provisional credit and had the you know what to charge interest on the disputed amount. I will take great pleasure milking their Altitude 3x categories, serves them right.

    Also, readers should be aware to keep their used Amazon gift cards and receipts, because Amazon cancels gift card balances after they’ve been loaded to your account if you trigger their algorithms and offers no refunds after they do so. They just seize the balance and don’t respond to emails or calls regarding their actions. You have to go to smalls claims court to get your money back from them. Guess that’s how Mr. Bezos makes his gift card business profitable…

    Read up on it here….

  5. US Bank VGC/MGC are the worst! It’s been going on for years now. I live in both Kroger and Ralph’s area due to my job. I experienced fraud with both in the past. I quit buying them due to the risk and headaches of getting my money back. I would’t be surprised at all if this was a insider job.

  6. I’d agree with Lee. I’ve also worked for a major issuer but not in the CB dept. Based on what I saw I felt it was over 80% in all cases for the cardholder. But I hadn’t expected 99%. I had a huge email argument with an online merchant here in Japan who charged prior to shipping ( and wouldn’t ship on time as they estimated. Knowing that I could violate them and told them they violated multiple M/C regs (including not a proper disclosure of final price clearly on the checkout page – actually a reg > look it up), they tried to put the blame on my misunderstanding which I told them to ship or stick it. They still nearly accused me of everything and acted as if they did nothing wrong. In this case, I gave them a chance to deliver or they get a c/b. They complied ultimately, and I got my camera on time….although a headache nobody should go through just to teach them to abide regs. They got lucky in my case – had plenty of chances.

  7. Having worked on the merchant side of chargeback for years I can tell you the consumer wins 99.9% of the time. The merchants are powerless. My company never won a chargeback case in the 3 years i oversaw them despite us having solid proof.

  8. Chase pretty much has to refund it — assuming they said “pound sand” then that’s a quick CFPB complaint. CC vendors must issue credits for fraudulent purchases so unless they can prove it wasn’t fraud (the burden is on them because you can show the card you have was never activated and testify to that) they’d be SOL in any counterargument.

  9. Thank you for the follow up. Too many times bloggers chase the story of the day and then quickly move on to the next one.

  10. Another thought would be the thieves could grab those empty gc from the stores, take it home and insert those fake barcodes, then take it back to the store and hang them back up the gc counter.

  11. This happened to me but US Bank stepped up when I explained what happened. They basically reported the card lost and refunded the replacement fee. They and Kroger did nothing to try to track down the fraudster but at least I wasn’t out of pocket for any loss.

    • I have to opposite experience with US Bank. They did nothing. I still buy VGC from kroger, but carefully feel the barcode and make sure it is on a plastic gift card.

      On the other hand, I had to deal with blackhawk VGC twice when I used to buy VGC from alberstons/safeway, blackhawk is took care of the situation like a champion. They sent me a replacement in 7 days, and made the refund within 29 days of opening the dispute.

  12. Being in IT for retail for over 15 years, I can tell you the fraud around gift cards is massive.. and getting worse every year…

    Most of the time, it does work out for the consumer… they get their money back.. but the banks and the merchants lose out… The money that was placed on the “other” card when activated is long gone.

    • They must make so much money on the back end of unused funds to deal with this level of fraud and to sell gift cards at discounts all of the time. It always surprises me that they are able to make it profitable.


Please enter your comment!
Please enter your name here