Millions of shoppers turn to the quick and traditionally easy choice for giving a Christmas present — a gift card.
Don’t be quick to go that route, experts say. And if you do, take extra precautions.
Scammers have found ways of turning the popular choice into a minefield that could steal your money and leave your intended recipient with no gift.
“Gift cards have been the number one requested gift for nearly 20 years,” says Martha Weaver, spokeswoman for the Retail Gift Card Association. “Unfortunately, like other payment tools, criminals have found ways to abuse gift cards and take advantage of honest shoppers.”
Those codes on the back of a gift card can be manipulated to send scammers the value of the card the minute you purchase it.
Gift card tampering (which can lead to “skimming,” where criminals drain the value of gift cards after tampering with the packaging and stealing the card numbers) is not a new type of scam, Weaver said. “Unfortunately, criminals are intelligent, ambitious, and innovative — and they spend a lot of time perfecting their crafts. This has led to increasingly sophisticated fraud tactics as we’ve seen in the news recently.
Here are five must-follow steps to follow when buying a gift card, according to the RGCA and GiftCardSafety.org as well as other similar websites:
1. Check packaging carefully
Inspect every aspect of the gift card packaging before purchase to make sure it hasn’t been tampered with, Weaver strongly advises, including:
- Make sure the PIN number is covered and hasn’t been scratched off.
- Make sure the packaging isn’t torn or open.
- Make sure the entire gift card is enclosed in the packaging (if you want to be sure, feel the packaging or open the gift card in front of a cashier to double-check).
- Make sure the gift card hasn’t been replaced with a piece of paper or non-gift card insert.
- If you suspect a card has been tampered with, give it to a store clerk — do not put it back on the gift card rack.
Many experts suggest only buying gift cards if they are locked up or held behind the counter. Cards that are out for weeks or months at retailers can be exposed to potential scammers for a longer period. A secure purchase online (with https at the start of the URL) might be a more secure option.
2. Keep your receipt
When you buy a gift card, keep your activation receipt as proof of your purchase.
3. Is it too good to be true?
Only buy gift cards from trusted sources. If you’re offered a deal that’s too good to be true, such as a big discount, it’s likely a scam or you’re getting a fraudulent card.
4. Use tight security
Store your gift cards securely and don’t share gift card numbers or PINs with anybody you don’t know.
5. Don’t use elsewhere
Gift cards can only be used at the company on the card. If you get asked to send money or pay for another service with a gift card, refuse the request and contact law enforcement, even if the fraudster tells you not to talk to anyone or a loved one is in trouble. No real government agency or business will ever reach out and ask you to pay them with gift cards — and you can’t pay taxes or bail money with gift cards.
Increased scam operations
Widescale tampering with gift cards has been reported in many United States jurisdictions.
In Sacramento, the police department’s Operation Bad Elf observed an individual, later identified as Ningning Sun, acting suspiciously near the gift cards in the payment aisles in a Sacramento Target store, according to a police department post on X.
Detectives watched him placing all the gift cards on a rack inside his jacket, then replacing the gift cards with another set of seemingly identical ones. After the suspect was stopped trying to exit the store with the stolen gift cards, detectives discovered over 5,000 gift cards from Target and Apple in his possession.
Their investigation revealed Sun was part of a scam that tampered with gift cards, scanned the bar code and stole money from the gift card as money was loaded onto them. Victims are completely unaware it is happening, and the money is often siphoned to an off-shore account within seconds. Their investigation revealed that the operation spanned across California and several regions nationwide.
The Sacramento County Sheriff’s Office urges residents to be cautious when purchasing physical gift cards from any retailer. Be observant of any signs of tampering, especially scuff marks or scratches near the bar code on the back of the card. These operations are very sophisticated and modifications to the gift cards are often virtually undetectable, even to the trained eye.
Beware of gift card shopping websites
There are a handful of websites where consumers can shop for a discount on gift cards. Each site operates a bit differently, but the basics include inputting your name, identity and credit card number and then “shop” for the retailer(s) you have in mind.
But once you’ve entered your credit card information, it is at risk and likely captured by fraudulent website operators.
“These “phishing” sites lure consumers in and have no affiliation with the brand(s) they feature,” Weaver said. “We advise consumers to do some due diligence before handing over credit card information and always buy from brands directly from the company’s own website or thoroughly research reputable third parties. Do not click on a link and provide credit card information without doing these things first — especially if you have not yet made a purchase.”
Retailers trying to combat problem
Most retailers have rigorous documentation and employee training programs and teach employees what to look for and how to assist a consumer who appears to be involved in an active scam, Weaver said.
In addition, more stores are putting signage on their gift card displays, warning consumers about potential scams. Some even have a list of questions the clerk needs the consumer to answer prior to allowing for the purchase of a gift card. Additionally, most retailers have adjusted the maximum dollar amount a consumer can put on a card and limit how many gift cards can be purchased in a single transaction.
