Alabama Residents Warned About Holiday Gift Card Draining Scam

As the holiday season gets into full swing, many Alabama residents will be purchasing gift cards for their loved ones. Known for their convenience and flexibility, gift cards are a popular gift choice.

However, these same benefits have also made them a target for scammers. The Better Business Bureau (BBB) Serving Central and South Alabama is warning shoppers about a rising holiday scam known as the “gift card draining” scam, which is causing frustration and financial loss for unsuspecting victims.

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How the Scam Works

The gift card draining scam relies on a simple yet effective method: tampering with gift cards before they are purchased. Scammers use handheld scanners to steal card information while the cards are still on store shelves. After capturing the card details, the scammer keeps a close eye on the card's balance by calling the retailer's customer service line. Once the card is activated, the scammer can either create counterfeit cards, use the balance to make online purchases, or transfer the funds to their own accounts—leaving the buyer with nothing but an empty card.

A recent report from the BBB’s Scam Tracker highlights a victim's experience: “A friend purchased a gift card from a local retailer, and the packaging seemed intact. However, when they tried to use the card, there was no money on it. Upon closer inspection, they noticed that a sticker had been placed over the barcode, diverting the funds to a scammer’s account.”

BBB’s Tips to Avoid Falling Victim to Gift Card Scams

To help residents avoid falling victim to this type of scam, the BBB is offering the following tips:

1. Inspect the Barcode and Packaging: Before purchasing a gift card, take the time to inspect it carefully. Run your finger over the barcode to ensure no stickers are hiding it. Choose gift cards that are in sealed packaging rather than loose cards on display. Look for signs of tampering such as tears, wrinkles, or any irregularities in the packaging. If you notice anything suspicious, report it immediately to the store’s customer service.
2. Buy from Trusted Retailers: Whenever possible, purchase gift cards directly from the retailer’s official website. Avoid buying gift cards from unfamiliar online sites or social media ads, especially those that offer steeply discounted prices, as these are often linked to scams.
3. Be Wary of Balance-Checking Sites: Some fraudulent websites claim to check the balance of your gift card but are designed to steal your card details instead. Only use official retailer websites to check your gift card balance.
4. Register Your Gift Card: Many retailers offer the option to register your gift card. Doing so can help you track the card's balance and quickly report any stolen funds. Registering your card provides an added layer of security in case the card is lost or compromised.
5. Treat Gift Cards Like Cash: If a gift card is lost or stolen, report it to the issuer immediately. Most retailers have toll-free numbers for lost or stolen cards, and acting quickly can help protect any remaining balance on the card.

Protect Yourself this Holiday Season

“Scammers are always looking for new ways to steal from consumers, especially during the busy holiday shopping season,” said Carl Bates, President and CEO of BBB Serving Central and South Alabama. “By staying vigilant and following these simple precautions, Alabama shoppers can enjoy the holidays without falling victim to these malicious scams.”

For more information or to report a scam, contact the BBB Serving Central and South Alabama at (205) 558-2219 or email Carl Bates at cbates@csal.bbb.org.

By being informed and cautious, residents of Alabama can help protect themselves and their loved ones from becoming victims of holiday fraud.