The newest gift card scam has arrived just in time to ruin your gift giving plans. Fraudsters are working overtime to drain your gift card before it reaches your intended recipient. The scam is referred to as “card draining,” as the intention is to drain the gift card you bought and paid for of its value and leave it with a zero balance.
How it works
Scammers go to the gift card displays in stores. They either write down the card numbers or use a reader to scan the bar code on the back. They use software to watch the balance and when the money is placed on the card and it is activated, they drain it, typically diverting the funds to an off-shore account.
Some more sophisticated fraudsters use devices to replace the silver scratch-off strip covering the access code, making it more difficult for the consumer to detect. Others choose cards that come in envelopes so the buyer can’t tell that the card has been tampered with.
How to protect yourself:
Gift cards have gained status among scammers because they don’t have the same level of protection as a credit or debit card issued by a bank. For the same reasons, you need to be alert when buying gift cards, especially during the holiday season when the scammers are particularly active.
Here are a few things recommended by law enforcement agencies that you can do to protect your purchase:
- Check the card closely for signs of tampering. In particular, look for scratch marks near the access code on the back of the card.
- Make sure the gift card is sealed and that the protective tape covering the pin number is intact.
- Keep the receipt issued by the store where you bought the card. And if the card has been “drained” or compromised at all, immediately report it to the gift card company and request a freeze on the card and a refund.
Gift cards are a favorite of scammers. They are easy, mostly undetectable ways to get your cash. As a general rule, it’s best not to use a gift card as a method of payment—for anything other than a gift to someone you know or to send somewhere you feel comfortable it will actually wind up.