Attorney General Brian L. Schwalb is alerting San Franciscans to be vigilant against a new kind of holiday heist that doesn't involve sleighs or Santa suits, but the seemingly innocuous gift card. A rising menace, these gift card "draining" scams are serious business, having evolved far beyond the phishing emails and phone calls of yesteryear. In a recent Office of the Attorney General for the District of Columbia, Schwalb detailed the scammers' tactics and offered tips on how to avoid being swindled.
"This holiday season, District residents should watch out for sophisticated gift card 'draining' scams that prey on shoppers who like to give gift cards as holiday presents," Schwalb warned in the statement. The alert underlines how, unlike traditional scams focusing on personal information acquisition, these require no direct interaction with victims to drain the preloaded funds from gift cards.
These scams can manifest in various forms. Scammers might scratch off the protective coating on the card to reveal the underlying code, then conceal their tracks, biding their time until some unsuspecting soul activates the card brimming with holiday cheer—only to find it sapped of funds. Another tactic includes tampering with the barcode so that when the card is sold and activated, the funds are diverted to another card, held by the scammer.
So what should you be looking for? Every shopper needs to be eagle-eyed, inspecting gift card packaging for any signs of tampering or damage, especially around critical points like the barcode and PIN. But caution extends beyond the obvious, the alert stresses, noting that even an unmarred gift card isn't automatically a safe bet. "Gift cards may seem like a safe and simple solution to gift giving, but scammers are finding new ways to drain their value before they’re even used," DISB Commissioner Karima Woods remarked in the statement in the Office of the Attorney General for the District of Columbia.
Protect yourself by purchasing gift cards from secure sources—stores that opt for locked displays or carry them at registers. Using credit cards for these purchases can also afford an added layer of protection, offering a pathway for investigation and potential reimbursement if you find yourself conned. Register the gift card with the retailer where feasible, and keep your receipt. Regularly checking the card's balance directly through the retailer's website or in person is another good habit.
And if, despite your diligence, you find yourself on the wrong end of a scam, keep that gift card and receipt, and don't hesitate: report the fraud to the appropriate authorities. Contact the DC Department of Insurance, Securities, and Banking (DISB) at 202-727-8000 or the OAG’s Consumer Protection Office at 202-442-9828. In addition, file a report with the local police and inform both the retailer and your credit card company to set the wheels of justice and refund in motion.
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