Greg's Corner

How common is gift card draining?

By Greg Collier

Recently, we made a post about how scammers can drain the value of a gift card as soon as you buy one. The scam has been dubbed “gift card draining” by law enforcement. While it may seem like a new scam due to the news coverage it’s been garnering lately, it’s been around since stores started selling gift cards on racks and kiosks. We don’t like to repeat subjects too often on this blog, but gift card draining has been so prevalent in the news, we thought we’d take another look at it.

In the gift card draining scam, scammers may tamper with physical gift cards available for purchase in stores. They may discreetly scratch off or expose the card’s activation code without alerting the store staff. Once the scammer obtains the activation code, they redeem the value on the card once it’s activated by an unsuspecting shopper. This makes it useless for the person who eventually purchases it.

If you’re wondering how widespread this scam is, you may want to take precautions while doing your holiday shopping this year. In Northern California, police were patrolling a Target store when they noticed a man allegedly taking gift cards from their racks and doing something to the cards before putting them back. When police officers approached the man outside the store, they discovered the man had thousands of gift cards inside his car. The cards were taken from 54 Target stores in 12 different California counties. The cards were stolen at stores from Los Angeles to the San Francisco Bay Area.

To protect yourself from potential gift card scams, consider implementing the following precautions. When purchasing gift cards, choose those from the middle of the pack, as they are less likely to have been tampered with. Conduct a thorough inspection of the card for any signs of alteration, especially if the security strip appears wrinkled or crooked, as these may indicate tampering. Keep the receipt when acquiring a gift card, as it can be valuable for assistance if the card is later found to be empty.

In the unfortunate event that you detect a tampered card, promptly contact the issuing company using the customer service number provided on the back of the card. Although there’s no guarantee of recovering your funds, taking this step can significantly expedite the resolution process.