Americans are caught in a cruel scam that could ruin Christmas.
‘Card draining’ occurs when criminals tamper with gift cards in stores, resulting in customers giving completely worthless cards as gifts.
Scammers temporarily steal batches of gift cards from stores so they can write down the card number and PIN or activation code.
At the moment, the cards are worthless because customers still have to load money on them.
But criminal gangs then return them to store shelves, knowing that holiday shoppers will soon shower them with anything from $5 to $500 at popular retailers like Target and Walmart.
Scammers also know that recipients of gift cards are unlikely to spend them immediately, even though by then they will have already spent the money loaded onto them.
Last year, police across the country warned of an increase in these scams, with Americans losing hundreds of dollars and confused recipients receiving useless gift cards.
And it looks like this year is no different: These scams are costing shoppers and retailers during the holiday season.
‘Card draining’ involves criminals tampering with gift cards in stores, resulting in customers giving completely worthless cards as gifts
Alexis Cruz wanted to surprise a family member with a $100 gift card, which she picked up off the rack at her local Target in Maryland.
“I opened the card so I could put it in a birthday card, but discovered the last four digits of the card number had been scratched off,” she said WMAR-2 News.
“And then you turn it over, there’s no CVV code, and you can actually see some discoloration there where they scratched it off or took it white out.”
Cruz, who works as a primary care physician, said when it was in the card box at the store, she couldn’t tell it had been tampered with at all.
The card was disabled for personal or online use, and the money was lost in the scam.
“Essentially, I just gifted a scammer $100 without knowing it,” she told the outlet.
Although Cruz added that losing $100 was “not the end of the world,” she noted that the scam was even more vicious during the holidays.
“There will be families buying hundreds of dollars worth of gift cards.
“What about the single parents or the families with five or six children who thought they were giving their children a nice Christmas and have now lost all that money?” she said.
WMAR-2 News contacted Target, who said they could replace Cruz’s gift card.
The retailer also added that it is redesigning its gift cards to prevent fraud.
Target gift cards no longer contain a printed security code. Instead, Target gift cards sold in-store will have an empty space where these codes used to be.
At checkout, a team member will apply a security access tag to the gift card, which reduces the chance of fraud, the company said.
Alexis Cruz was scammed out of $100 when she bought a gift card at her local Target store
Alexis explained how the card was tampered with so scammers could access the money she loaded onto it
Some Americans have described the embarrassment of giving a gift card only to discover it has a $0 balance on it.
Suzanne Gdovic told DailyMail.com last year how she bought a $200 Target gift card – which she didn’t know had been tampered with – and gave it as a gift for a baby shower.
A few weeks later, she received a text from her friend’s daughter, to whom she had gifted the card, saying there was no money on the card.
A message had also appeared on the cashier’s screen stating that the gift card had been linked to someone else’s account.
“It was embarrassing,” Suzanne said. ‘And I felt bad for her. You’re willing to spend $200 and then suddenly it’s not there anymore. And then of course she had to pay for it.’
Others have outlined the crushing experience of receiving a gift card whose funds have been used up.
TikTok user Tawnee posted video Last month she told how she had received cards that had been tampered with at her baby shower.
Visibly upset in the video, she described how she had gone to Walmart to buy baby clothes with a $200 gift card, only to be told there was a $0 balance on it.
“For someone who stays home with their kids, lives on one income and lives in a studio, $200 is a lot of money,” she said.
Suzanne Gdovic accidentally gave away a worthless gift card after it was targeted by criminals – which was supposed to be worth $200
TikTok user Tawnee posted a video last month talking about how she received cards that were tampered with at her baby shower
Retailers are trying to combat the problem by increasing consumer awareness and changing packaging to make it safer
Tawnee also added that she had tried to use a $50 Target gift card she had received, and discovered that it had been used up.
“Be careful buying gift cards around the holidays because there’s clearly someone in their house on the computer taking people’s gift cards and taking them for themselves,” she said.
Consumers reported losing as much as $217 million to gift card fraud in 2023, according to the Federal Trade Commission.
Retailers are trying to combat the problem by raising consumer awareness and changing packaging to make it safer, but Maryland is the only state that has passed a law to help curb the scam.
The Gift Card Scams Prevention Act of 2024, which goes into effect next June, requires secure packaging for most gift cards sold in person.
This means that the numerical codes on cards must be better hidden from scammers.
It will also ensure retailers provide consumers with signage to keep a spotlight on scams while shopping and to think and look for any type of tampering, Cailey Locklair, president of the Maryland Retailers Alliance, told WMAR- 2 News.
When they go to checkout with an employee, “that employee is mandated to receive training on this so that employee also looks for tampering or anything that indicates fraud with that gift card,” she said.
While Maryland is the only state to enact these changes in law, Locklair is confident it will lead to other states following suit.
“It will change the packaging nationally – it’s not just a Maryland bill,” she shared ProPublica.