With the holidays rapidly approaching, giving gift cards to family or friends has become a handy way of giving gifts for the Christmas holidays or any other time of year. Over the years however, retail thieves have found ways to steal the funds that you put onto the gift cards. The thieves in essence have found ways quickly “drain” the funds that you have placed on the gift card then use the money for their own purposes.
Draining is different from other criminal uses of gifts cards that
you may have heard about. That is when scammers force a victim to pay the
scammer for supposed fees, fines, bail, or simple extortion, sometimes draining
the victim’s bank accounts to nothing. Cybersecurity educators have over the
last few years been teaching that gift cards are for gift giving, and not for
paying government, utilities, or anyone else for supposed late fees or fines. If
someone, out of the blue, wants to be paid in gift cards, that is a signal to
hang up.
Retail gift card fraud has turned into an International Organized
Retail crime enterprise conducted by large, well-organized gangs who collect the
cards and the account information on them. In some cases, teams of gang members
steal blank gift cards from retailers, hand them over to other gang members who
extract the account information and PINs then carefully return the card into
its original packaging. They may send the account information to a central gang
authority. Then the original “runners” who stole the cards, return the cards to
the original retail store’s racks. In the meantime, other gang teams monitor
the account balances of the stolen gift cards using sophisticated software. As
soon as the software detects a balance over $0, the team drains the gift card
of any funds placed on it. They may put the funds in a virtual wallet. In some
cases, gangs purchase popular retail items, then sell those items to further
launder the originally stolen funds.
Major retailers have built security into some gift cards and gift
card packaging in an attempt to get ahead of the fraudsters. However, as with
many security measures, gift card secure packaging will not be perfect. It still
is up to us to take steps as best that we can to protect ourselves from gift
card draining. As one Homeland Security Investigations agent put it in a recent
webinar, consumers should treat gift cards like they treat produce or meat. You
can,
·
When purchasing gift cards in a store, inspect the card packaging
closely for tampering. Does the masking for the card number look like it has
been scratched off? Does the packaging look like it has been tampered with? Don’t
be afraid to be picky. Being picky might save you from an embarrassing call
from the recipient of your gift card.
·
Keep the receipt. This can be your proof you made the purchase if there
are problems with the card.
·
Purchase the gift card directly from the desired vendor. Cards
from the vendor are less likely to have been tampered with by an unauthorized
person. When ordering online from the vendor, be sure that you make your order
from the vendor’s legitimate website. If you want an Apple gift card, order it
from Apple.
·
DO NOT order gift cards from 3rd party vendors or from
gift card “auctions” when ordering online. Some websites claim to sell other
people’s gift cards. There is no marketplace for secondhand gift cards!
·
On giving the gift card, encourage the recipient to use it as soon
as possible or redeem the funds by putting them in a virtual wallet. That way
the card is blank, and your friend or family member has the funds.
If you do receive a blank card, call the customer support number
on the back of the card. This is the financial institution who is backing the
card for the retailer or the brand name on the card and should be able to help
you.
National Cybersecurity Alliance:
Season of Light, Season of Scams: Avoiding Gift Card Fraud- a webinar
with an interview of a Homeland Security Investigations agent
ProPublica:
https://www.propublica.org/article/chinese-organized-crime-gift-cards-american-retail
Federal Trade Commission:
https://consumer.ftc.gov/consumer-alerts/2019/12/tips-holiday-gift-card-shopping
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