“Gift Card Exploitation” Scams Rise As Holiday Season Begins – KSTP

Gift card exploitation scams are on the rise during the holidays

As we head into the holiday season, a gift card scam known as “card draining” is occurring.

The Federal Bureau of Investigation warns that gift cards could be activated with $0 balances due to this growing scam.

Priskila Basnet of Woodbury said she recently received a $50 gift card, but when she used it, she realized it had been tampered with.

“It kept saying it was ‘invalid’ and the gift card was linked to another account, so I thought it was a mistake,” Basnet said.

The Better Business Bureau, which serves Minnesota and North Dakota, told 5 EYEWTNESS NEWS that “card loss” can occur in two different ways.

One involves a thief going into a store and taking down the numbers associated with a gift card, including the 16-digit code and activation PIN.

“So you have this information and then you wait for someone to activate that card. The moment they do this, due to the sophistication involved, the fraudsters will be alerted that the card has been activated and they will immediately empty the card,” explained Bao Vang, vice president of communications at the regional BBB.

Another method of “card withdrawal” is to cover the barcode with a sticker associated with another card.

“Then the clerk scans that barcode to add the amount, but that amount is not credited to your new gift card, but directly to the scammer’s account, and you have no idea,” Vang said.

Vang noted that BBB’s online scam tracker is currently receiving a growing number of reports of card fraud.

“There has never been a greater time in our history for gift card purchases for the holiday season,” Vang said. “So the fraudsters are expanding their targets, their tactics and their strategies.”

The BBB recommends inspecting a gift card closely before purchasing to check for signs of tampering and to look for additional stickers that appear out of place.

Basnet said that in her case, the retailer was able to refund the money to her friend who purchased the gift card.

“It’s really sad and disheartening that people can do something like this,” Basnet said. “I want people to know that this is happening. And the fraud as a whole must be stopped.”

To learn more about “card usage” and how you can protect yourself, the BBB has created this list of tips.

For related stories: Christmas shopping gifts Alex Jokich scam


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