How to Avoid Gift Card Scams or Compromised Gift Cards
How to Avoid Gift Card Scams and Compromised Gift Cards (that has been Tampered With).
Gift card scams are on the rise. It is quite common to find tampered cards right on Walmart or Kroger store shelves. In 2022, Americans reported losing a staggering $228.1 million to these prepaid gift card scams. But there are a few simple precautions you can take to avoid falling prey to gift card scams, and compromised prepaid gift cards.
The most important part is to be aware how the scams work.
Understanding Prepaid Gift Card Scams.
Scammers often target gift cards displayed in stores. They secretly record the activation codes from these cards and then use them to steal the card’s value. This leaves the actual buyer with a worthless card when they go to use it. This can happen already on the card distribution level, and/or in retail shops.
Gift Cards Scams – Why They are Common.
Gift cards are a favorite for giving because they’re simple and versatile. But, they also attract scammers. This can cause financial loss to the victim, but also embarrassment and frustration for both the gift card giver. They are popular targets of scammers, as prepaid gift cards can be used to buy goods that can quickly be resold for cash. And because the gift cards are anonymous and are not registered with a name or address.
Checking for Prepaid Gift Card Tampering.
Always inspect the gift card carefully before buying:
- Barcode Integrity: Make sure the barcode hasn’t been tampered with or replaced. If the barcode sticker seems raised or doesn’t match the cashier’s system description, it might have been swapped.
- Packaging: Look for any signs of tampering like torn or resealed wrapping. Scammers might place a fake barcode sticker over the real one.
The ‘fake barcode’ scam is common. In this scam, the scammers print and place their own gift card barcode over the real barcode. Then, when the barcode is scanned at the store check out, the cash value is actually added to the scammer’s card instead of the gift card that your are buying.
Prepaid Gift Card Buying Tips.
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- Pick Cards from the Back: Scammers usually tamper with cards at the front. Choosing one from the back reduces your risk.
- Buy in View of Cashiers: Cards within sight of the cashier or locked away are safer.
- Be Wary of Unknown Brands: If you don’t recognize the brand, do some research before purchasing. Scammers sometimes create fake cards for non-existent companies.
What to Do If You Suspect a Prepaid Gift Card Scam.
If something seems off, talk to a store associate immediately, and consider contacting the Federal Trade Commission (FTC). Also, let the company that issued the card know—they might replace it.
Common Types of Prepaid Gift Card Scams.
Most gift card scams involve replacing the barcode on the gift card, or cards being emptied by store staff or distributiion staff, before they are sold.
Be vigilant! I have added a list of other common prepaid gift card and debit card scams to watch out for:
Advance Fee Scam:
This modern twist on the classic wire transfer scam uses emails instead of mail. Scammers, using fake email addresses, trick victims into paying upfront fees with the promise of receiving a prepaid card loaded with cash.
Card Reloading Scam:
Here, scammers pretend to be from a payment processor or a bank and contact merchants claiming there’s an issue with loading a card. Using stolen card details, they convince staff to reload the card, which allows them to transfer or withdraw money. Sometimes, this scam can go on multiple times before being detected.
Card Skimming:
In this scam, fraudsters use a device to capture data from a card’s magnetic stripe. They load this stolen data onto another card. When a customer buys and activates this tampered card, the scammer uses the information to make unauthorized purchases or withdrawals.
Card Swapping:
Scammers duplicate or alter numbers on a stack of gift cards and then return them to the store. Unsuspecting customers buy these tampered cards, and when they load funds, scammers quickly drain them.
Tax Return Fraud:
Some tax services use prepaid cards to issue refunds to people without bank accounts. Scammers, armed with stolen identities, file tax returns and direct the refunds to prepaid cards under their control.
Staying vigilant and informed is your best defense against these scams. If you’ve had an experience or have tips, sharing them in the comment section below can help others avoid falling victim.
