Gift Card Scams Are on the Rise: What Shoppers Need to Know This Holiday Season
As the holiday season approaches, gift card sales surge — and unfortunately, so do scams. The Federal Trade Commission (FTC) reports that last year gift cards were mentioned in at least one-quarter of all recent fraud complaints.
To help protect our community, we're sharing what’s happening, how scammers operate, and what you can do to stay safe while shopping this season.
Why Gift Cards Are Being Targeted
Gift cards are fast, convenient, and difficult to trace — features that appeal to consumers and criminals alike. Scammers count on busy shoppers rushing through checkout and may take advantage of retailers with large card displays.
One of the fastest-growing types of fraud is the gift card draining scam.
How the “Gift Card Draining” Scam Works
Scammers have developed an efficient system:
- They take gift cards off the rack before purchase.
- They record or copy the card numbers and PINs.
- They return the cards to the shelf, making them look untouched.
- They wait for someone to buy and activate the card.
- They automatically drain the balance using software the moment the card becomes active.
Retailers are strengthening security with tamper-resistant packaging and hidden PINs, but these protections aren’t foolproof. Staying alert is still the best defense.
How to Protect Yourself When Buying Gift Cards
1. Inspect the card and packaging
Before you buy, look for:
- Scratched-off or exposed PINs
- Damaged, opened, or resealed packaging
2. Buy from trusted, reputable retailers
Whenever possible, purchase gift cards at checkout counters or directly from official websites. This reduces the chance that the cards have been tampered with on open racks.
3. Save your receipt and packaging
If the card is compromised, your receipt and original packaging are critical when reporting fraud to the retailer or the FTC.
Other Gift Card Scams to Watch Out For
Gift card fraud often extends beyond in-store tampering. Stay aware of these common red flags:
- No legitimate business or government agency will ever demand payment via gift card.
- Scammers may impersonate law enforcement, the IRS, tech support, or a family member and pressure you to act quickly.
- Check balances only through official websites or phone numbers printed on the card — not through links sent by text, email, or social media.
What to Do If You Think You’ve Been Scammed
If you suspect gift card fraud, act right away:
- Report the incident to the FTC: visit ReportFraud.ftc.gov.
- Contact the retailer: provide the receipt, the card, and any details about when and where you purchased it.
Prompt reporting increases the chance that some or all of the funds can be recovered.
Help Keep Holiday Spending Safe
Gift cards can be a convenient and thoughtful present, especially during the holidays. With a few extra precautions, you can help protect yourself and your loved ones from scams and keep your celebrations focused on what matters most.
