Gift Card Tampering: How Thieves Drain Cards Before You Buy

Gift card tampering is one of the simplest scams in the store, and it costs shoppers millions each year. You buy a card believing it is loaded with the amount you paid. By the time the recipient tries to use it, the balance is zero. The thief never needs to steal your wallet or hack your bank. He only needs a few minutes alone with a rack of cards and a way to record the numbers and personal identification numbers before you activate them.

The most common method is draining. A thief takes cards from a display, peels back the cardboard or scratches a tiny portion of the PIN covering, writes down the card number and PIN, then reseals the package. The card looks new. You buy it, the cashier activates it, and the thief checks the balance later. Once the card is active, he uses the number and PIN online or over the phone to buy merchandise or drain the value. You are left with a card that looks legitimate but is empty.

A related trick is card swapping. Thieves bring their own tampered cards or stolen cards into the store. They replace the real cards on the rack with cards they control, or they place a sticker with a different barcode over the real barcode. When the cashier scans the barcode, the system activates the thief’s card, not the one you are taking home. You pay, the thief gets the balance, and your card is worthless.

Prepaid cards and reloadable cards have their own risks. Some carry activation fees, monthly maintenance fees, balance inquiry fees, and reload fees that eat into the value. Others have expiration dates or inactivity fees. Read the fine print on the back before you buy. If the terms are hard to find or the card has too many fees, choose a different card or give cash.

You can reduce the risk. Buy gift cards from a reputable retailer, preferably from behind the customer service counter or a locked case. Avoid cards hanging on open racks near the front of the store. Inspect the packaging before you pay. Look for peeled corners, wrinkled cardboard, clear tape, glue residue, scratched-off PIN areas, or a barcode sticker that does not match the card. If the card looks tampered with, hand it to the cashier and ask for another one from a different batch.

After you buy, keep the receipt and the activation slip. If the card allows registration, register it with the issuer. That can help prove you were the purchaser if the balance is stolen. Use the card sooner rather than later. A gift card sitting in a drawer for months gives a thief more time to drain it. If you are giving the card to someone, tell them to check the balance as soon as they receive it.

If you discover that a gift card has been drained, act quickly. Call the issuer and report the fraud. Contact the retailer where you bought it. Keep your receipt, the card, and any packaging. File a complaint with the Federal Trade Commission and your state attorney general. Recovery is not guaranteed. Once the money is spent, the issuer may say the card was used with the correct PIN, and you may have a hard time proving you did not spend it.

Never use gift cards to pay a debt, tax bill, utility bill, bail, or tech support fee. No legitimate government agency or company demands payment by gift card. If someone tells you to read the numbers off the back, that is a scam. Treat the card like cash. If you would not hand cash to a stranger over the phone, do not hand over a gift card number.

The best defense is a few seconds of inspection and a habit of buying from a controlled location. Thieves depend on speed and privacy. They want cards that sit unattended and buyers who never look closely. When you check the package, buy from the service desk, keep the receipt, and use the card promptly, you make their job much harder. A gift card is supposed to be a simple gift. With a little care, it can stay that way.