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4 Ways Thieves Use Giftcards to Commit Fraud

Jackie here. We recently discussed using gift cards and prepaid cards as anonymous form of payment, making this scam alert from the IC3 especially relevant. If you use gift cards, be sure to keep your eyes open so you don’t become a victim.
Gift cards are a popular source of fraud, probably due to their anonymous nature. Thieves can make purchases and access funds, all without ever having to reveal their identity. They utilize many different methods to execute this fraud. Let’s take a look at a couple:
Tactic #1- Steal and Return
Gift cards have no value until activated, so they aren’t usually under lock and key at the store. This makes them very easy to steal. Thieves steal the worthless gift cards, record card numbers and PINs, and then return the cards to the shelves at the store. These cards then wait for an unsuspecting buyer to purchase them and activate the funds. As soon as the card is activated, the thief uses the balance to make their own purchases online.
Tactic #2- Duplicate UPCs
In this gift card tampering method a thief will create multiple identical UPC barcodes for a gift card. These UPCs will be applied to cards at the store over the card’s existing code. When someone purchases a card, the UPC sticker is scanned and the balance added is put directly onto the card with the matching UPC, which is owned by the fraudster. They keep track of the balance, and as soon as it increases they spend it, often before the fraud is noticed by the consumer.
Tactic #3- Stolen Merchandise for Cards
Thieves don’t just tamper with gift cards on display; they also use them as part of other fraudulent schemes. For example, a fraudster might steal merchandise from a store and return it in exchange for store credit. They then use these gift cards as a trade to purchase drugs, other gift cards, or sell them for cash.
Tactic #4- Buying a Card for Sale
People that don’t want a gift card they’ve received often attempt to sell it. This gift card scam preys upon those with gift cards for sale. The thief will contact the seller and act interested in the card. They will request that a three way call be made to the retailer to ‘verify’ the balance amount. The seller calls the merchant with the fraudster on the line and enters in gift card information. The fraudster will then use special software to obtain the card number and PIN, which they then sell online.
Be careful with your gift cards so you don’t fall victim to one of these scams. Check out the full fraud alert from the IC3 here (second alert on the page).

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