No kidding, you read that right.

I was reviewing a statement for one of my merchant accounts this morning and noticed a warning to avoid a new scheme to defraud merchants and cardholders that has been identified as “Cash Back” fraud. Apparently the bad guys are targeting gift shops and flower shops and transaction amounts have been ranging from $2K – $4K.

Here’s how it works. The “cardholder” ordering the flowers or gift will ask for “cash back” with their payment card order, typically received over the phone, email, or fax. Next, they’ll ask that the “cash back” be used to wrap the flowers or gift being purchased.

The victim merchant will be asked to wrap the gift in $10, $20, $50, or even $100 bills as a special “surprise.” The victim merchant may even be asked to send cash via Western Union or by bank wire to another party.

I’m sure you can guess what happens next. Seriously, who falls for this stuff? Who would ask to have purchases wrapped in cash, especially in this economy? And what business owner would actually take their hard earned money out of their register and do this? Probably the same type of people who wire money to strangers in Africa to help them escape their troubles. At any rate, you can now consider yourself warned.