Attorney General Brian Schwalb Issues Alert Warning District Residents About Gift Card Scams

Attorney General Brian L. Schwalb today issued the below Consumer Alert warning District residents to be on the lookout for gift card scams this holiday season. The alert provides details on common tactics that scammers use, tips on how to avoid falling victim to a gift card scam, and instructions on what residents should do if they believe they have been scammed.

"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. Unlike traditional scams that focus on manipulating victims into revealing personal information, these scams involve draining the gift cards of the funds loaded on to them without the scammers even having to contact their victims," said Attorney General Schwalb. "Anyone who believes they have been scammed should immediately reach out to local law enforcement."

"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," said DISB Commissioner Karima Woods. "We urge District residents to inspect cards carefully and report suspicious activity to DISB or the OAG."

CONSUMER ALERT: Watch Out for Gift Card Scams This Holiday Season

What is a Gift Card Draining Scam?

With the holiday season in full swing, shoppers should take steps to protect themselves from gift card "draining" scams, which sophisticated thieves use to steal your money without even getting your personal information or contacting you at all.

Draining scams take place in many different ways. Scammers may take an unpurchased gift card off the rack, scratch off the back of the card to reveal the code, and then cover it up again. Once the card is bought and activated, the scammer accesses the card online (using the swiped code) and steals the money on the card. Scammers also sometimes take unpurchased gift cards off the rack and replace the barcode with a barcode that has already been activated. After the card is bought and activated, its funds are diverted to the scammer's card with the alternate barcode. In other cases, scammers scan the codes of unpurchased gift cards off the rack and wait until you buy and activate the gift card to steal your money.

What Should I Look Out For?

• Gift card packaging with signs of damage and tampering. Pay especially close attention to the bar code and PIN number to see if anyone has scratched off any information or added or removed any stickers. But remember, even a gift card that appears untouched could still be unsafe to buy.

What Else Can I Do to Protect Myself from This Scam?

• Buy gift cards from stores that keep their gift cards in a safe place. Safer practices can include locking their gift cards in display racks, keeping gift cards at the register instead of on a display rack, or displaying gift cards without bar codes and only adding a bar code once a card is purchased.
• Pay by credit card if you can. If you believe you have been scammed, your credit card company may be able to investigate and help you get your money back.
• Register your gift card with the retailer if possible and keep your receipt. You can also check your gift card balance in person or directly on the business's website to confirm that the funds have not been stolen.

How Do I Report This Scam?

If you do fall victim to this scam, remember to keep the gift card or a copy of your receipt. Then, report the scam to:

• The DC Department of Insurance, Securities and Banking (DISB) at 202-727-8000; and
• OAG's Office's Consumer Protection Office at 202-442-9828 or [oag.dc.gov/complaint]oag.dc.gov/complaint.

It may also help to file a report with your local police department. Please also report the scam to the business you purchased the gift card from. And if you bought the gift card with a credit card, contact your credit card company to ask them to help get your money back.

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