BALTIMORE — It’s one of the most popular holiday gifts, but more shoppers are discovering their gift cards have a zero balance before they’re even used.
Thieves are stealing unactivated cards, recording the numbers and barcodes, then placing them back on the rack. Once an unsuspecting shopper buys and activates that card, fraudsters move quickly — draining the balance within minutes.
“I couldn't tell that this thing had been tampered with at all," said Alexis Cruz.
She bought a $100 gift card as a present — but someone else spent the money first.
“Essentially, I just gifted a scammer $100 without even knowing it.”
A Maryland business ran into the same problem, handing out gift cards to employees as appreciation gifts.
“We were giving them gift cards and they were coming back to us saying they had been used,” said Erin Sudano, collections manager at Sudano’s Produce.
And Bel Air Police Sergeant Sergio D’Alto says it happened to him as well.
“I received a gift card, this was two years ago, went to go use it at a local retailer, straight out of the packaging, opened at the register and zero on the card,” Sgt. D'Alto said.
D’Alto added that the scam has nothing to do with speed at the register. Criminals use automated notifications that alert them the moment a card is activated.
“If they unpackage the card, they'll repackage it just as nicely as it was in the original, and they're reintroduced into the stores put back on the shelves, an unsuspecting person buys it. The minute it's activated, it notifies the computer system this card's activated and like I said, the money is drained before you hit the parking lot,” said D'Alto.
With cases rising, several states have passed new rules requiring retailers to add warnings, secure packaging, or hide barcode and PIN information. The Retail Gift Card Association says they’re constantly updating best practices as scammers evolve. Executive director Karice Moore urges shoppers to inspect cards closely.
“Make sure that you don't see any anomalies, anything that looks a little bit off or unusual. And if you do, before purchasing, take it to the counter, let the cashier know it looks a little unusual, choose a different card," said Moore.
Some retailers are making changes, too. Target redesigned its store-branded gift cards to leave the PIN area blank until checkout, where an employee applies a sticker with the PIN number. The company says the change has led to a significant decrease in fraud.
Moore tells shoppers to stay alert.
“Even something as small as a scratch mark that just doesn't quite sit right. Just be aware,” said Moore.
WMAR-2 News Mallory Sofastaii asked Sgt. D’Alto if he still plans to buy cards off the rack this holiday season.
“I am still buying gift cards. I don't think this is such a prevalent issue where I would say don't buy gift cards. Just have some due diligence,” D'Alto recommends.
If your gift card gets drained — or you’re tricked into sending the balance to a scammer — you may not get that money back. Keep your receipt, contact the retailer right away, and remember to treat gift cards like cash.
According to AARP, at least 11 states have passed new laws this year cracking down on gift-card fraud. These laws are already in force in states like Maryland and Florida, and others are set to take effect soon.
For additional tips on protecting your gift cards, click here.