Police: Uptick in ‘Card Draining’ Scam Impacting Gift Card Holders

Law enforcement and scam victims are warning consumers of an uptick in “card draining,” a form of retail theft that robs gift card holders blind, the Daily Mail reported Sunday.

One disappointed shopper told the Daily Mail how “embarrassed” she felt after she purchased a gift card at Target to send to someone, only to find out that it had been wiped of its $100 value by the time the receiver tried to use it.

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“I bought a gift card for my friend’s daughter who had a newborn baby,” said Dina Swartz to the outlet. “I bought the gift card in San Antonio, Texas, and mailed [it] immediately to my girlfriend’s daughter in Austin Texas. When she tried to use it, it had a zero balance.”

Swartz was a victim of the scam known as card draining, which the publication says involves crooks “temporarily stealing batches of gift cards from stores — sometimes hundreds at a time — so they can make a note of the card number, as well as the PIN or activation code.”

She ended up having to file a complaint with the store to get a replacement card.

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“I felt embarrassed that my friend’s daughter — who is a young mother with a newborn — had to go through this process,” Swartz added.

The Daily Mail interviewed several other victims, who each lost between $100-$650 from purchasing gift cards that had been tampered with.

According to the Better Business Bureau, gift card fraud has increased by 50 percent since last year alone.

Police in Pinole, California, warned Instagram users of a form of the scam, which involves thieves removing gift cards from sealed envelopes, cutting off the activation code, and placing the re-sealed cards back on display for unsuspecting shoppers to buy and load money onto.

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“What we’re advising to do, is if you are buying a gift card, feel for the entire card, which should be the same size as a credit card,” said Sergeant Barry Duggan in the public service announcement.

“Or with the permission of the store, when you go up to purchase these, remove them from the sealed envelope and make sure that the whole card is there.”

The Sacramento County Sheriff’s Department is also going after these scammers, having recently busted an alleged member of a well-organized fraud ring. 

“[Retailers] need to put these behind the shelves, they need to control access to them, or they need to completely take them off the shelf,” Detective Andy Cater said to reporters in early December.

“Victims are completely unaware it is happening, and the money is often siphoned to an off-shore account within seconds,” the sheriff’s office said in a statement on Facebook, along with the suspect’s details. 

Police said that after Ningning Sun was stopped from “trying to exit the store with the stolen gift cards, detectives discovered over 5,000 gift cards from Target and Apple in his possession.”

Target said they’re staying vigilant to thwart scams in a statement to CBS News.

We are aware of the prevalence of gift card scams and take them very seriously. We have signs in our stores and share general safety tips with our team members so they can stay alert and help guests as best as they can at our registers. Our centralized cyber fraud team helps educate our team members about common scams and encourages them to look for guests purchasing high dollar amounts or large quantities of gift cards, or tampering with gift cards in stores. We appreciate law enforcement’s action on this case and will assist them with their investigation.

When it comes to extra tips to avoid card draining scams, the Daily Mail advised consumers to “make sure a card has not been tampered with — including scratches or scuff marks near the barcode on the back of the card.”