Your shopping list may not be quite finished. But after weeks of shouldering through the holiday crowds — you certainly are.
So you decide gift cards are good enough to get you to the finish line.
That scene is so prosaic that the gift card has become an ubiquitous present in the culture, and is now one of the go-to options for many during the holidays. And it makes sense: they provide ready cash on a card to shop at favorite stores or dine at a favorite restaurant.
But there is a red alert this year — about a gift card scam that drains the cards customers later purchase.
It’s been around awhile, but is finally getting some notice.
Los Angeles County Supervisor Janice Hahn was among the victims of the latest holiday Grinch-worthy trick and talked about the problem at a morning news conference on Thursday, Dec. 21. The CVS store at Park Plaza Shopping Center on Western Avenue in San Pedro — where she purchased the card — was the backdrop for the media briefing.
Hahn said she’d purchased a Visa gift card for her nephew last week for his birthday. But when he tried to use the card for a purchase, it came up with a $0 balance.
“What I lost on this gift card I was easily able to repay in cash to my nephew,” Hahn said. “But I am worried about the people who are barely scraping by who can’t afford to be ripped off.”
The scam, known as “gift card draining,” can work a couple of ways:
- Scammers attach a barcode from a card they already have to an unsold gift card in a store. When someone buys the tampered card and loads money onto it, they are loading money onto the scammer’s card.
- A scammer steals the details off a legitimate gift card and then places it back on a store rack. The scammer can then track when the card is bought and loaded and quickly drain the money.
Hahn is calling on retailers to take proactive steps to better protect the open card racks by securing the merchandise behind glass or behind cash registers, sending the request in a letter also to the CEO of CVS on Thursday.
“Gift card racks are typically placed in high-traffic areas of our stores,” CVS Health spokesperson Amy Thibault said in an email, “such as near our front checkout or pharmacy counter.”
Asked whether the retailer was considering placing the cards in more protected areas, she wrote, “We don’t provide information on specific security measures.”
The San Pedro store,Thibault said, has been alerted and CVSwill investigate further..
“Gift card and prepaid card scams are a challenge to all retailers,” Thibault wrote. “We regularly alert our store teams about gift card scams and recommend our employees check their gift card racks daily for tampered cards.”
Several steps are taken to protect the in-sore products, she said, and CVS has put up signs warning customers about the scams.
Hahn, however, wants stores do more.
“I’m calling on retailers like CVS, Target, Walgreens and others to take immediate steps to protect their own shoppers from these scams,” Hahn said. “It should not be up to consumers to defend themselves from scams when you have the power to prevent them altogether.”
Specifically, Hahn called on retailers to place gift cards behind glass or a service desk while scams continue and to better train check-out clerks to recognize fake barcodes placed on cards, which Hahn said can sometimes be detected by running a hand over them to see if they are raised (indicating a problem).
“Last week, I visited one of your stores here in Los Angeles County and picked up a Vanilla Visa gift card for my nephew’s birthday,” Hahn wrote in her Thursday letter to CVS Health CEO Karen S. Lynch. “I took it up to the register and asked to load it with $100. But when my nephew went to use the gift card, all the money had already been spent.
“I got ripped off,” she added, “but I found out I was just one of many victims of a growing gift card scam.”
Stores, she said, now put everyday items behind glass or counters, suggesting that is because theft of those items “hurt your bottom line.”
But gift card scams, Hahn said, hurt shoppers.
“(Retailers) have a responsibility to your customers to protect them from these scams,” Hahn wrote, “and if you wanted to, you could take action tomorrow.”
CVS Health said tips for shoppers include:
- If a barcode can be peeled off during an inspection, it is a fake.
- Ensure the barcode printed on the gift card matches the barcode printed on the gift card packaging.
- When the gift card barcode is scanned by the cashier, the type of gift card displayed on the cash register should match the card itself. If it doesn’t, cancel the transaction.
- If you notice anything suspicious about a gift card, notify the store manager immediately.
- Keep your receipt. That will help customers file a police report if they think they’ve purchased a fraudulent card.
