What are gift card draining scams? 

Card draining scams involve thieves stealing or altering gift card numbers before the cards are purchased. Here’s a common method: 

1. Stealing numbers: Scammers take gift cards off shelves and steal the cards' information, often by photographing or writing down the codes and PINs. They replace these manipulated cards back on the shelf. 

2. Counterfeit swaps: Sometimes, they replace real cards with counterfeit ones, which buyers pick up unknowingly. 

3. Waiting for activation: Scammers monitor the card online or use bots to check balances regularly once the card is bought and activated.  

4. Draining funds: Scammers drain the funds as soon as they see an available balance. They will transfer the stolen money to other accounts or use them on digital marketplaces. 

By the time the gift is presented, the money is long gone. 

Scamming through phishing and vishing 

Scammers will also perpetuate gift card draining scams through social engineering, such as tricking the gift card's true owner into giving away its sensitive information through email or phone calls. The criminals may impersonate customer service or telemarketing representatives, and this type of fraud goes hand-in-hand with grandparent scams and other common scams.   

How to Protect Yourself 

While retailers are working to secure gift card racks, here are some ways to protect yourself when buying gift cards:

1. Examine the gift card and packaging: Check for tampering, like peeling stickers, scratched-off PIN codes, or signs that the card’s packaging has been opened and resealed. Look for tears in the zigzag cuts around the perimeter of the secure pack or visible paper fibers around the borders where a sharp knife may have cut through an edge. 

2. Choose cards from behind the counter: Cards displayed behind the register or handed to you directly by a store clerk are less likely to have been tampered with. 

3. Opt for digital gift cards: Buying directly from the store’s website or a reputable source reduces physical exposure and tampering risk. Never share the digital card's information over the phone, email, or other form of communication. Use it in secure payment portals only.   

4. Use the card quickly: Encourage recipients to spend the balance soon after receiving it to prevent scammers from finding and draining the card's data. 

5. Save receipts and monitor balances: Keep all receipts and periodically check the card’s balance online until it’s entirely spent. In some cases, this can help with reimbursement if fraud occurs. 

'Tis the season to stay a step ahead  

Card draining fraud is not a present anyone wants, but by taking a few precautions, you can protect your gift from being compromised. Inspect your cards and buy digital gift cards to keep the holiday cash out of the scammers' stockings! 

Watch our webinar to learn more!