Suzanne Gdovic wanted to send her friend's daughter a gift card that she could freely redeem at Target.
It was a baby shower gift and she wanted her friend's daughter to have $200 to spend on everything she needed before the newborn was born. Instead, she sent her a card with no balance.
Suzanne, 64, of Arvada, Colorado, is one of many who have fallen victim to a card exploitation scam – resulting in people receiving completely worthless gift cards.
Sneaky fraudsters occasionally steal stacks of gift cards from stores – sometimes hundreds at a time – to write down the card number and PIN or activation code.
At this point the cards are worthless because the customer has not yet loaded any money onto the card. But then criminals return them to store shelves — knowing that buyers will eventually load them with amounts of up to $500 — and steal the money before the recipient can spend it.
Suzanne Gdovic accidentally gave away a worthless gift card – which was supposed to be worth $200 – after it was targeted by criminals
Police are warning of a rise in these scams over the Christmas period as last-minute shoppers look for gifts for family and friends.
Scammers know that gift card recipients are unlikely to try to spend them before Christmas. By this point, the gangs have already spent the money charged to them, resulting in confused recipients receiving gift cards with $0 balance.
But this crime doesn't just affect shoppers this time of year.
A recent Better Business Bureau study found that reports of gift card fraud have increased by 50 percent this year alone.
Suzanne purchased the $200 Target gift card at her local store in September, which she did not know had been tampered with.
A few weeks later, she received a text message from the daughter of the friend she had given the device to, telling her that the balance was at $0. A message also appeared on the cashier's screen stating that the gift card was linked to someone else's account.
“It was embarrassing,” Suzanne told . “And I felt sorry for her. You're willing to spend $200 and then suddenly it's not there. And then of course she had to pay for it.'
Suzanne immediately went to Target to find out what was going on.
The manager at her local store told her that they knew of a case of fraud where criminals come in, scrape off the protective metal strip and access the activation number on the card – before expertly reattaching the strip.
The $200 gift card became worthless after it was targeted by the “card exploitation” scam
When the recipient attempted to use the card, a message appeared on the cashier's screen stating that the gift card was linked to someone else's account
Not only was Suzanne angry about losing the money, she also didn't want the same thing to happen to anyone else.
“I asked for all the cards to be removed from the shelves because people were buying them while I was talking to the manager,” Suzanne said. “The target has my money and the crook has the gift!”
She contacted Target's corporate office and finally received her money back in November – two months after she originally purchased the gift card.
“There was no indication in the letter that came in that they were replacing this because of the fraud,” Suzanne said. “Retailers need to start helping us. “I feel sorry for the people who don't get their money back.”
contacted Target but did not immediately receive a response.
But Target isn't the only retailer targeted by criminals – who use a variety of tactics to deceive shoppers.
Police are warning Americans about a rise in a scam called “card draining” that results in people being given completely worthless gift cards
In some cases, fraudsters even secretly open the sealed envelopes in which the cards are stored, cut off the part of the card with the activation code and keep it.
They then put the cut card back into the envelope – with the barcode still visible so a cashier can scan it and add money – which they can then steal.
Earlier this week, reported that authorities across the country have warned about the scam – which also involves gift cards from Apple, Amazon and Visa Vanilla, among others.
Victims from across the country came forward to say they had lost up to $650 – and mistakenly given completely worthless gift cards to their loved ones.
How to avoid card emptying scams
- Make sure a card has not been tampered with – including scratches or scuff marks near the barcode on the back of the card
- Make sure the gift card is sealed and the protective PIN code or activation code cover is intact
- Check that the full card is in the case and the activation code has not been cut off
- Keep the receipt in case you discover the card has been compromised
- If you discover that the card has been compromised, report it to the gift card company and request a balance freeze and refund
Dina Swartz of Texas said she was “embarrassed” after sending a friend's daughter a gift card whose $100 value was erased.
“I bought a gift card for my friend’s daughter who had a newborn baby,” she said.
“I purchased the gift card in San Antonio, Texas and immediately sent it to my friend's daughter in Austin, Texas. When she tried to use it, it had a zero balance.'
Dina filed a complaint with Target — and the company ended up re-issuing the card and sending it directly to her friend's daughter.
“I was embarrassed that my friend's daughter – a young mother with a newborn – had to go through this process,” she said.
Greg Clark told how he bought two $500 Visa Vanilla cards at a Walgreens store in Manhattan, New York City.
When he went to spend them, he saw that a total of $650 had been charged to the cards, and some of that had been spent on online purchases on Amazon.
He said he saved the packaging and noticed that there were sticky dots on the bottom of the sealed envelope where one of the cards had been – an indication that the card had been tampered with.
Another victim, Sonja Neilson, said she was also scammed out of $100 using a Vanilla Visa card – and would never buy one from the store again.
Police are warning buyers to look for signs that a card has been tampered with before purchasing – such as scratches or scuffs or missing parts of the card.
In order to get to the numbers, the criminals usually scratched off the silver security foil. They then replace it with a nearly identical sticker or another film that is sold online on sites like Alibaba.
Damage to the card or foil is a tell-tale sign that fraudsters have accessed the card's data – putting the funds on the card at risk of being stolen.
According to the National Retail Federation, Americans are expected to spend $29.3 billion on gift cards in 2023.
Police in Pinole, California, warned of something else to watch out for – after officers discovered a variant of the scam. In an Instagram video they explained the scammers' alternative tactics.
Police in Pinole, California, warned buyers about the scam in an Instagram video
They said criminals stole gift cards, removed them from sealed envelopes and then cut off the activation code hidden under the sealed envelope in the store.
“We encourage you to consider the entire card when purchasing a gift card, which should be the same size as a credit card,” Sergeant Duggan of the Pinole Police Department said in the video.
“Or with the store's permission, remove this from the sealed envelope when purchasing and ensure the entire card is present.”
Earlier this month, Ningning Sun was arrested and accused of tampering with gift cards at a Target store in Sacramento
According to the County Sheriff's Office in California, a man was arrested earlier this month and accused of tampering with gift cards at a Target store in Sacramento.
Under a Sheriff's Office Facebook post warning of the scam, one person wrote, “Last Christmas we received a Target gift card with no balance and it was a sensitive issue to bring up with the senders.” That explains probably why the gift card balance was zero.”
Police said Ningning Sun was seen stealing gift cards and replacing them on the shelf with another set of seemingly identical cards. It is believed he put a stack of cards, for which he and his gang had received details, back on the shelves.
Investigators then discovered over 5,000 Target and Apple gift cards in his possession.
The Sacramento County Sheriff's Office said its investigation revealed that Sun was part of a gift card scam that spanned California and several regions across the country.
“Sun was part of a fraud that tampered with gift cards, scanning the barcode and stealing money from the gift card as money was loaded onto it,” it said in a statement.
“The victims are completely unaware of this and the money is often transferred to an offshore account within seconds.” “These processes are very sophisticated and changes to the gift cards are often virtually undetectable, even to the trained eye,” it continues.