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Every year, American consumers spend more than $130 billion on gift cards, and every year scammers are out to steal money that consumers have loaded on these cards. In fact, criminals can easily deplete the value of a card before consumers have a chance to use them.
Tactics include taking gift cards displayed in stores and using a skimmer to read the card’s magnetic strip; criminals can also simply copy the card number. Some fraudsters place replacement stickers over scratch-off codes that have already been exposed. Once they possess the card data, criminals monitor the cards online until a consumer takes the card to the register and adds a balance.
Alan Brill, Senior Managing Director in Cyber Risk practice at Kroll, a division of Duff & Phelps, stresses that buyers should understand how gift cards can be vulnerable to criminal activity. “As long as a bad guy can get to the card, there’s a real chance that the bad guy can take over the card in a way that you’ll never notice,” says Alan Brill “Buyer beware doesn’t stop when you switch from physical merchandise to gift cards.”