Recently, a 30-year-old man was arrested in Snohomish County, Washington for his part in a scheme to defraud Target and its customers of more than $700,000.
Jeffrey Mann, of Marysville, Washington, led a group of five people who used a system to alter gift card numbers and used them across five western states to commit the fraud.
According to records in the case, the theft ring stole gift card balances worth more than $700,000 and often sold illegally purchased goods or store gift cards for bitcoin on an internet marketplace.
The group used a formula to engineer and identify unique bar code numbers on thousands of authentic gift cards sold by Target to legitimate customers.
Next, the criminals used the retailer’s automated customer service telephone system to verify balances linked to the various stolen gift card numbers.
Then they loaded active gift card numbers onto a mobile or electronic wallet app on their phones, which the thieves used to purchase merchandise and legitimate gift cards at various Target store locations across at least five states: Washington, Oregon, California, Nevada and Colorado.
For example, on a single occasion in November 2017, Mann and others used roughly 180 compromised gift card numbers to make $6,900 in purchases at the Southcenter Mall Target store in Tukwila, Washington.
When the actual cardholders later tried to use their gift cards, they discovered that they had zero balance. Mann, the leader of the ring pleaded guilty to wire fraud.
With the holiday season upon us, gift cards are ripe for giving, receiving and even stealing.
Gift cards have been one of the most popular presents that Americans give and receive.
In fact, 59% of consumers say that’s what they want this holiday season. While 73% of shoppers say they will be giving at least two gift cards as presents this year.
The problem is, the huge popularity of gift cards makes them a prime target for thieves.
And so you don’t get ripped off this year, I want to share with you a few tips to help keep you safe from having your gift cards compromised.
Exposed PIN. One of the most common ways that gift card balances are stolen is by thieves simply copying the card number.
Basically, scammers visit stores and write down the card number and PIN on the back of a card.
After the card is purchased, the bad guys hop online and use up the balance.
To avoid falling victim, check the card to see if the wrapping has been tampered with or if the PIN code has been revealed, typically by being scratched off.
If it has, definitely alert the store and don’t purchase the card.
Not the right sticker. Some thieves will sift through a store rack and place a sticker over a card’s activation code, with their activation code.
Then, when you place a certain amount of money on the card at the cash register, it will actually go to the scammer’s account and not yours.
In other words, the cashier will type in the code thinking that it’s for your gift card, when you are actually putting money on another card that the thief has control of.
Reselling gift cards. There are legitimate websites that allow people to resell gift cards they don’t want.
They are an easy way to get rid of a gift card that you’ll never use and exchange it for one that allows you to purchase from a retailer that you prefer.
The problem is, it’s very difficult to tell if the gift cards you buy from these websites are legitimate. In other words, they could be stolen or simply have zero balance left on the card.
So, I would avoid using any of these websites even if they appear to be legitimate.
Buy from behind the counter. Oftentimes, you will see gift cards on aisle end caps or by the checkout area.
If you see the gift card you want to purchase behind the counter, or even near the checkout counter, purchase one of these as they are less likely to have been tampered with.
In addition, anytime you purchase a gift card, always ask the cashier to confirm the amount currently available on the card. If the card is zero, then you obviously know it has been compromised.
There is no question that gift cards have long been a staple for those of us who don’t know what to buy for a friend or family member during the holiday season.
The fact is, 26% of fraud cases reported in 2018 involved gift cards as the payment method.
While gift cards are incredibly convenient, they are a target for fraudsters looking to steal money from retailers and innocent shoppers.