From the Better Business Bureau

Gift cards are a popular and convenient gift-giving option, but they are also a target for scammers. Stay one step ahead and shop carefully to avoid a scam known as “gift card draining.”
Here’s how the gift card scam works: Scammers tamper with gift cards in stores using handheld scanners to capture card information, then periodically check the balance by calling the retailer’s 800 number.
Once the card is activated, they either clone and create counterfeit cards, use the information to shop online, or divert the funds to their own cards, leaving the unsuspecting buyer with an empty gift card.
One person shared their experience with this scam on BBB Scam Tracker. “A friend got a gift card at [company name redacted] and the paper packaging had not been visibly tampered with. The clerk scanned the barcode that is visible through the paper packaging’s ‘window’ and applied the funds, but when my friend went to use the card, he saw this sticker had been carefully inserted through the ‘window’ to cover up the barcode. The card itself had no funds on it.”
Before purchasing a gift card, BBB recommends the following tips:
• Check for tampering with the stickers covering barcodes. Before buying a gift card at the store, run your finger over the back to check whether a sticker has been applied on top of the barcode. Scammers can tamper with in-store gift cards by adding barcode stickers over the top of the card’s real barcode. These fraudulent bar codes are connected to a different gift card account that the scammer controls. That means when you scan a phony barcode at the check-out and pay, you’ll add cash to a scammer’s account rather than onto your newly purchased gift card.
• Inspect the packaging. No matter where gift cards are displayed in the store, thieves are known to remove gift cards from the display rack and record the numbers associated with that card, including the activation PIN. Reports share that scammers may even scratch off the card’s security codes. Look carefully at the packaging for any tears, wrinkles, or other indications of tampering, and see if the PIN or barcode is exposed. Sometimes, scammers can reseal gift card packages so well that you don’t even notice. If anything at all looks suspicious, take a different card and turn in the compromised card to the store’s Customer Service Desk.
• Consider purchasing your gift card online, but use caution. Purchasing a gift card online may be a safer option so you can avoid the possibility of buying a compromised card at a store. If you do purchase online, make sure you are purchasing directly from the merchant’s real website. Watch out for websites or social media ads promoting gift cards for popular retailers at steep discounts. These websites might use these offers to steal payment card numbers or other personal information. Look for the BBB Seal or search the business on BBB.org to see if it is a trustworthy retailer.
• Research how to use the card. Not all retailers have the same policies when issuing a gift card.
• Double-check the terms and conditions of the type of gift card purchased. The Federal Trade Commission has information on avoiding gift card scams.
• Be wary of websites that offer to check your gift card’s balance. According to BBB Scam Tracker reports, some websites that claim to check your gift card balance are really a way to steal money off your card.
These sites ask for your card’s ID number and PIN or security code. Then, scammers use the information to drain the money from your card.
• Register your gift card. If the retailer offers the option to register the gift card, take full advantage. This makes it easier to protect the balance; you can report stolen funds sooner and potentially save the money stored on the card. Change the PIN on the card, and don’t delay using the money. The longer a card sits around, the more likely a cybercriminal will steal the balance.
Treat it like cash. Report the card to the issuer immediately if it is lost or stolen. Most issuers have toll-free telephone numbers for reporting lost or stolen cards — find them on the card or online.