Hackers have cracked the algorithm that Apple uses to generate its gift cards for iTunes and a key generator has been made for it. Chinese site Taobao is selling them for less than 3% of their face value.
Chinese market researcher Outdustry has confirmed that the fake gift cards do indeed work by buying one and were able to add it to an iTunes account. You can get $200 cards for about US$2.60.
How Apple is going to address this will be troublesome. Changing the algorithm that generates the cards could render existing cards as unusable. Rendering all cards that are for sale and have been sold useless could be a huge marketing blunder for Apple, even if they promise to let people exchange them for new ones at a retail store.
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