Avoid holiday heartache: Discover the harsh truth behind this gift card scam
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The holiday season is a time of joy, generosity, and giving, but it's also a prime time for scammers to prey on the festive spirit.
Here at The GrayVine, we're committed to keeping our community informed and protected, especially when it comes to the latest schemes that could put a damper on your celebrations.
Today, we're sounding the alarm on a particularly cruel scam that's been making the rounds: gift card fraud, also known as “card draining.”
Imagine the disappointment of giving or receiving a gift card, only to discover it's completely worthless. That's the harsh reality of “card draining.” Here's how the scam unfolds.
Criminals stealthily remove gift cards from store racks and record the card numbers and PINs or activation codes. These cards are still empty, as they haven't been activated with funds by a customer yet.
The scammers then return the tampered cards to the shelves, lying in wait for unsuspecting shoppers to load them with money.
Once a shopper purchases and loads the card, the scammer, who has been monitoring the card number, quickly drains the funds.
This scam commonly targets holiday shoppers that load up cards with $5 up to $500 at popular retailers such as Target and Walmart.
Scammers know that the receivers of these gift cards usually don’t spend it immediately. By then, the scammers would have spent the money loaded onto these cards.
In 2023, police across the country sounded the alarm for a rise in these scams, which led to Americans losing hundreds of dollars, and confused recipients receiving gift cards with no value.
This scam isn't just about the money—it's about the emotional impact as well.
People like Alexis Cruz from Maryland experienced this firsthand when she attempted to gift a $100 card, only to find it had been compromised.
According to Alexis, “I opened the card so I could put it in a birthday card, only to find that the last four digits of the card number had been scratched off. And then you flip it over, there's no CVV code, and you can actually kind of see some discoloration there where they have either scratched it off or put white out.”
Alexis said that when the card was inside its casing in the store, she couldn’t tell that it had been tampered with at all. She added, “Essentially, I just gifted a scammer $100 without even knowing it.”
She worries about families purchasing hundreds of dollars’ worth of gift cards. “What about the single parents or the families with five or six kids that thought they were giving their kids a good Christmas and have now lost all that money?”
Upon the team from WMAR-2 News getting in touch with Target, the retailer is said to replace Cruz’s gift card. The company also decided to no longer include a printed security code.
Rather, the cards would have a blank space where a team member can apply a security access label to the gift card upon checkout. This move is in hopes of lessening the chances of fraud.
Some Americans have felt extremely embarrassed that they’ve given gift cards with zero balance. Suzanne Gdovic gave her friend a $200 Target gift card, which unfortunately had been tampered with, and gave it as a gift for a baby shower.
A message appeared at the checkout saying that there was no money on the card and it was already connected to someone else’s account.
A social media user named Tawnee also posted a video, narrating her experience of receiving cards that have been tampered with at her baby shower. “To somebody who stays at home with their kids, living on one income, living in a studio, $200 is a lot of money,” she said.
Last year, consumers reported losing a huge $217 million in gift card fraud, according to the Federal Trade Commission.
Retailers have been trying to solve this problem by altering packaging and raising awareness, but Maryland has taken a proactive stance against gift card fraud with the Gift Card Scams Prevention Act of 2024.
Source: Boyd Clewis / Youtube.
This legislation mandates secure packaging for gift cards and requires retailers to provide clear signage about potential scams. Employees will also receive training to spot signs of fraud. While Maryland is the first to pass such a law, it's hoped that this will set a precedent for other states to follow.
Have you or someone you know been affected by gift card fraud? Do you have additional tips for avoiding these scams? Share your stories and advice in the comments below!
Here at The GrayVine, we're committed to keeping our community informed and protected, especially when it comes to the latest schemes that could put a damper on your celebrations.
Today, we're sounding the alarm on a particularly cruel scam that's been making the rounds: gift card fraud, also known as “card draining.”
Imagine the disappointment of giving or receiving a gift card, only to discover it's completely worthless. That's the harsh reality of “card draining.” Here's how the scam unfolds.
Criminals stealthily remove gift cards from store racks and record the card numbers and PINs or activation codes. These cards are still empty, as they haven't been activated with funds by a customer yet.
The scammers then return the tampered cards to the shelves, lying in wait for unsuspecting shoppers to load them with money.
Once a shopper purchases and loads the card, the scammer, who has been monitoring the card number, quickly drains the funds.
Americans are being warned about “'card draining,” a scam where criminals tamper with gift cards, leading to shoppers unwittingly giving worthless cards as presents. Image source: Target.
This scam commonly targets holiday shoppers that load up cards with $5 up to $500 at popular retailers such as Target and Walmart.
Scammers know that the receivers of these gift cards usually don’t spend it immediately. By then, the scammers would have spent the money loaded onto these cards.
In 2023, police across the country sounded the alarm for a rise in these scams, which led to Americans losing hundreds of dollars, and confused recipients receiving gift cards with no value.
This scam isn't just about the money—it's about the emotional impact as well.
People like Alexis Cruz from Maryland experienced this firsthand when she attempted to gift a $100 card, only to find it had been compromised.
According to Alexis, “I opened the card so I could put it in a birthday card, only to find that the last four digits of the card number had been scratched off. And then you flip it over, there's no CVV code, and you can actually kind of see some discoloration there where they have either scratched it off or put white out.”
Alexis said that when the card was inside its casing in the store, she couldn’t tell that it had been tampered with at all. She added, “Essentially, I just gifted a scammer $100 without even knowing it.”
She worries about families purchasing hundreds of dollars’ worth of gift cards. “What about the single parents or the families with five or six kids that thought they were giving their kids a good Christmas and have now lost all that money?”
Upon the team from WMAR-2 News getting in touch with Target, the retailer is said to replace Cruz’s gift card. The company also decided to no longer include a printed security code.
Rather, the cards would have a blank space where a team member can apply a security access label to the gift card upon checkout. This move is in hopes of lessening the chances of fraud.
Some Americans have felt extremely embarrassed that they’ve given gift cards with zero balance. Suzanne Gdovic gave her friend a $200 Target gift card, which unfortunately had been tampered with, and gave it as a gift for a baby shower.
A message appeared at the checkout saying that there was no money on the card and it was already connected to someone else’s account.
A social media user named Tawnee also posted a video, narrating her experience of receiving cards that have been tampered with at her baby shower. “To somebody who stays at home with their kids, living on one income, living in a studio, $200 is a lot of money,” she said.
Last year, consumers reported losing a huge $217 million in gift card fraud, according to the Federal Trade Commission.
Retailers have been trying to solve this problem by altering packaging and raising awareness, but Maryland has taken a proactive stance against gift card fraud with the Gift Card Scams Prevention Act of 2024.
Source: Boyd Clewis / Youtube.
This legislation mandates secure packaging for gift cards and requires retailers to provide clear signage about potential scams. Employees will also receive training to spot signs of fraud. While Maryland is the first to pass such a law, it's hoped that this will set a precedent for other states to follow.
Have you or someone you know been affected by gift card fraud? Do you have additional tips for avoiding these scams? Share your stories and advice in the comments below!
