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02-24-2017 • How to Protect Yourself When Purchasing Gift Cards

We here at We Own Our Bank recently had a personal encounter with a unique scam: gift card theft.

We went to use a gift card we had received for Christmas only to find out someone had already used it—just a few weeks earlier. And the only way the thieves could have done this was to have the numbers on the back of the card and used it online! That’s because the gift card was still in its original packaging and had never left our sight.

In doing some research we found out this type of gift card theft is starting to pick up steam due to the sheer number of gift cards now being sold. According to, more than $100 billion is spent on gift cards every year.

Here’s how the scam works. The thief will either take a number of gifts cards off the rack and write down (or scan) the numbers on the back or take photos of the backs of the gift cards. In some cases, the thief may even also scratch off the strip to get the security code and put on a replacement strip.

When the card is activated, the thief is ready to go shopping. How? That’s because he or she has either registered the card online or has software that provides notifications on when the card is activated and its balance. Or the thief has made a duplicate gift card to use in stores or restaurant. And because most retailers or restaurants don’t require a PIN number, it’s much easier for the thief to get away with it.

But there are ways to protect yourself and the gift card recipient:

  • Change where you buy your gift cards. Consider buying gift cards online or directly from the store or restaurant. Thieves don’t necessarily have access to these cards.
  • Be Choosy. If you must purchase from a store rack, consider picking one from the middle of the rack (which may cut down the possibility of having been compromised), according to
  • Look at the gift card. Looks for any signs of tampering, such as a scratched off or replaced PIN number.
  • Change security code. If you can do so, Consumer Reports suggests registering the card as soon as possible and changing the PIN number. If you’re gifting the card, make sure the recipient knows what you’ve done and to ask him or her to use the card quickly.
  • Keep your receipt. If you find the card has been compromised, you might be able to get your money back from the store that sold the card or the retailer where the gift card is redeemable.