While in the old days, this would no doubt have come from Creep McShady in a trench coat around the corner of some noir-esque alley, now its online fraudsters who’ve gamed Apple’s iTunes gift certificate generation algorithms, unable to sell directly due to fear of Apple tracing the accounts, who’ve found a new target for their schemes. Says Apple Insider:

Third party iPhone App Store developers have received propositions from a scammer offering to buy large volumes of their iPhone applications and then split the resulting revenue with them, apparently using fraudulent iTunes gift certificates to make the purchases.

Of course, the developers faces every bit as much chance for retaliation from Apple, perhaps more so because this could end their careers as iPhone developers.

Yeah. Not a good idea.

You can’t use an iTunes gift certificate to buy applications on the Canadian App Store. I’ve experienced this myself, but never really looked into it before now. But it’s true. There’s even a thread about it on Apple’s Discussion Board.

Highlights include the difference in iTunes App Store Terms of Service between the US:

“10. PAYMENT METHODS. The Service accepts credit cards, payment through your PayPal account, and iTunes Cards, iTunes Store Gift Certificates, and Allowance Account balances as forms of payment.”

And Canada:

“10. PAYMENT METHODS. The Service accepts credit cards as the form of payment.”

Further down, we get what’s purported to be a response from Apple on the issue, which includes:

Due to tax laws and commerce restrictions for software in Canada, customers residing in Canada may only purchase games and applications using a credit card.

So, not only do we get hosed on data rates, don’t have access to US TV networks on iTunes (nor Hulu, etc.), not only do we have to pay more to “upgrade” music to iTunes Plus, but if by some miracle some kindly soul gives us an iTunes Gift Certificate, we can’t even use it on apps?

Sigh.

UPDATE: As of June, 2010, iTunes Gift Cards can now be used to buy apps in iTunes Store Canada.

Since you can’t buy an iPhone 3G without signing up for an AT&T (or insert international carrier) contract, it kind of destroys the potential of giving an iPhone as a gift (cramming a whole kiosk into gift box would be killer!). So, what to do, what to do? TUAW says, Apple to the rescue!

Give someone an iPhone 3G Gift Card and when the lucky recipient comes in to redeem it, an Apple Retail Store Specialist will take care of every detail. The Specialist will get your recipient’s iPhone 3G up and calling, set up email, and help customize the Home screen, choose some great iPhone applications, personalize ringtones, and find favorite songs.

Does this make the iPhone 3G a more appealing gift possibility to anyone? Would opening an envelope and finding a shiny new iPhone 3G gift certificate, rather than an iPhone itself, be as glee worthy?