Gift cards are a popular last-minute present many of us purchase. But the ones bought off the rack are also a common tool scammers use to exploit people. In 2021, the Federal Trade Commission reported that gift cards were the top payment method for scammers, leading to a reported $148 million stolen from consumers.
Here’s how the physical gift card scheme typically works: Scammers will target display racks of gift cards, especially when the rack is out of sight from cashiers or pharmacy counters, explained Kathy Stokes, director of fraud prevention programs with AARP, an interest group which educates older adults about protecting their assets from scams and fraud. They will then tamper with the packaging to take off any film strip, record the gift card and pin number, and then cover up their tampering. Some scammers have even used fake barcodes as a sticker covering up the gift card’s real barcode.
Then, “they set up a computer program that has an algorithm that follows those cards. And when any of those cards are manipulated like that go to the register for activation, that criminal is pinged, and they are able to drain the funds off of that card,” Stokes said. In other words, when you buy and put money on a compromised card, the scammer can spend or transfer the funds before you or your gift recipient can use it.
Why do scammers love gift cards? It’s because it’s quick cash and because gift cards are not as protected as other forms of payment. Stokes explained t.
