I am not great at picking out gifts for other people, so gift cards feel like the perfect present. They are simple to buy, easy to give, and widely accepted by stores. That convenience is also what makes them attractive to criminals. Gift card scams steal billions of dollars from consumers every year, and once the money is gone, it is almost impossible to recover.
For years I’ve been listening to the radio show (now podcast) of Clark Howard, who has warned for a long time not to trust the gift cards purchased off the racks at pharmacies, grocery stores, or anywhere they are sold.
The criminals use automated tools to monitor the balances of the compromised cards. When a legitimate customer purchases and activates a card with funds, the scammers immediately steal the money by making online purchases or transferring the balance to their own accounts.
The good news is that spotting these scams is not difficult once you know the warning signs that I learned from him.
Check the card before you buy
Gift card racks in stores are open to everyone. Scammers sometimes tamper with the packaging, record the numbers, and wait for someone to activate the card. They may even will steal the cards and bring them back to the store after capturing the information.
- Before buying one, look carefully at the packaging. Make sure it has not been opened or altered. Look for tears, wrinkles, or exposed nicks along the pull tabs or sealed edges.
- If you can see the back of the card, check that the protective strip covering the PIN is still intact. The protective scratch-off layer over the PIN should be flat and smooth. Avoid cards where the cover is missing, has pieces missing, or shows signs of having been removed and reapplied.
- Run your finger over the back of the card to check for a fraudulent barcode sticker placed over the original printed barcode.
- Check for misaligned printing, smudges, excess glue residue, or unusual card thickness compared to other cards of the same brand.
- Take a card from the back of the rack, because the scammers will have the put the vulnerable ones at the front. Or better yet, only buy from stores where the gift cards are placed in a secure location, just like Costco does with the various gift cards and gift certificates they sell.
Always keep the receipt since it can help you if you need to report an issue to the card issuer. When possible, purchase digital gift cards from the official websites of well known retailers like Amazon or Walmart. This simple step protects you from cards that have been altered or compromised in stores.