(Getty images)
Whether you're buying a gift card online or grabbing one off the shelf at a store, shop carefully to make sure you're not falling for a scam. In a recent twist to this scam, known as "gift card draining," criminals tamper with gift cards in stores using handheld scanners to capture card information, then periodically check the balance by calling the retailer's 800 number. Once the card is activated, they either create counterfeit cards, use the information to shop online, or divert the funds to their own cards, leaving the buyer with an empty gift card.
This new twist has prompted the Department of Homeland Security to launch "Project Red Hook," a task force dedicated to combating gift card draining scams.
Before purchasing a gift card online, BBB recommends the following tips:
- Buying a physical gift card? Watch for stickers covering gift card barcodes. Before buying a gift card, run your finger over the back to check whether a sticker has been applied on top of the barcode. Reports say that scammers can tamper with in-store gift cards by adding stickers printed with barcodes over top of the card’s real barcode. These fraudulent bar codes are connected to a different gift card account that the scammer controls. That means when you scan a phony barcode at the check-out and pay, you’ll add cash to a scammer’s account rather than onto your newly purchased gift card.
- Look for ripped or wrinkled card packaging. No matter where gift cards are displayed in the store, thieves are known to remove gift cards from the display rack and record the numbers associated with that card, including the activation PIN. Before purchasing a gift card, look carefully at the packaging for any tears, wrinkles, or other indications of tampering, and see if the PIN or barcode is exposed. If anything looks suspicious, it’s probably best to take a different card and turn in the compromised card to the store’s Customer Service Desk.
- Pass on too-good-to-be-true gift card deals. Watch out for websites or social media ads promoting gift cards for popular retailers at steep discounts. These websites might use these offers to steal payment card numbers or other personal information. Instead, go directly to the merchant and purchase a card from them.
- Research how to use the card. Not all retailers have the same policies when issuing a gift card. Double-check the terms and conditions on the type of gift card purchased. The Federal Trade Commission has information on avoiding gift card scams. In Canada, find more information on the Financial Consumer Agency of Canada website.
- Be wary of websites that offer to check your gift card's balance. According to BBB.org/ScamTracker reports, some websites that claim to check your gift card balance are really a way to steal money off your card. These sites ask for your card’s ID number and PIN or security code. Then, scammers use the information to drain the money from your card. Here’s an example of this scam in action.
- Register your gift card. If the retailer offers the option to register the gift card, take full advantage. This makes it easier to protect the balance; you can report it sooner and potentially save the money stored on the card. Change the PIN on the card, and don’t delay using the money. The longer a card sits around, the more likely a cybercriminal will steal the balance.
- Treat it like cash. Report the card to the issuer immediately if it is lost or stolen. Most issuers have toll-free telephone numbers for reporting lost or stolen cards—find them on the card or online.
For more information
When a store goes out of business, its gift cards do, too. Learn more about what to do with your gift cards if a store goes out of business.
BBB Serving Central California & Inland Empire Counties contributed to this article.
For more online shopping tips, visit the BBB Online Shopping HQ.