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Gift cards are a popular choice for holiday gift-giving, offering convenience and flexibility. However, they have also become a prime target for scammers, leading to what is known as the “gift card draining” scam. 

The Better Business Bureau (BBB) Serving Central and South Alabama is urging holiday shoppers to be cautious and vigilant when purchasing gift cards this season.

How the Scam Works:
Scammers tamper with gift cards in stores by using handheld scanners to capture card information. They then monitor the card’s balance by calling the retailer’s customer service line. Once the card is activated, scammers either create counterfeit cards, shop online, or transfer the funds to their accounts—leaving the unsuspecting buyer with an empty card.

A recent BBB Scam Tracker report shares a victim’s experience:
“A friend purchased a gift card at a local retailer, and the packaging appeared intact,” the victim recalled. “However, when they tried to use the card, it had no funds. Upon closer inspection, a sticker had been inserted over the barcode through the packaging’s ‘window,’ diverting funds to a scammer’s account.”

BBB’s Tips to Avoid Gift Card Scams:

Inspect the Barcode and Packaging: Before purchasing, run your finger over the barcode to ensure no sticker is covering it. Choose cards in sealed packaging rather than loose cards on display. Look for signs of tampering, such as tears, open bar codes, or wrinkles in the packaging. If something appears suspicious, report it to the store’s customer service.

Consider Buying Online from Trusted Sources: Purchasing directly from a retailer’s official website can reduce the risk of tampering. Avoid steeply discounted gift cards on unfamiliar websites or social media ads, as they may be scams.

Be Cautious of Balance-Checking Websites: Some fraudulent sites claim to check gift card balances but steal your card details instead. Only use trusted, official retailer sites to check balances.

Register Your Gift Card: If the retailer offers registration, take advantage of it. Registering your card allows you to report stolen funds more quickly and secure the balance.

Treat Gift Cards Like Cash: If lost or stolen, report the card immediately to the issuer using their toll-free number. Act quickly to protect the remaining balance.

“Scammers are always looking for new ways to steal during the holiday season,” said Carl Bates, CEO of BBB Serving Central and South Alabama. “By staying informed and taking precautions, shoppers can enjoy the season without falling victim to these schemes.”

For more information on Gift Card scams, visit BBB.org.