Home » Industry News » Gift Card Draining: Another Form of Digital Theft
Gift Card

Gift Card Draining: Another Form of Digital Theft

Imagine this–a customer approaches the checkout counter with a high-dollar item. He or she pulls out a partially-used gift card, and to the customer’s surprise, the balance comes up as zero.

What happened?

Your customer experienced a form of digital theft known as “gift card draining.” There are many ways that scammers can partake in this form of theft.

“Thieves can replace packaged cards with used cards, or skim the magnetic chip code on a card, or simply copy down the numbers,” according to NBC News.

“You can scam gift cards in a matter of seconds,” security analyst Thomas Ciccone shares with NBC News. “It’s easy to go into a store, or mall, and go up to one of those kiosks, take any gift card you want off the rack. You can either copy the number down or you can run it through one of a skimming device.”

The NBC News article suggests ways for consumers to protect themselves from gift card draining. However, there are also two ways you and your staff can protect your customers.

1. Strategically Showcase Gift Cards

In order to prevent thieves from accessing unpurchased gift cards in your store, keep them behind the sales counter in a way that they’re still visible to customers. And if you have a website offering e-commerce sales, consider selling gift cards online so customers receive a specific digital code, or receive a physical card directly from your company.

2. Inspect Gift Cards Before the Sale

If a gift card has been tampered with, it’s possible that the gray strip has been scratched. This would reveal the redemption code. Ciccone explains that some thieves can even re-apply the gray strip after copying the code. Sell the customer a different gift card if a new card looks like it’s been handled.

About Hilary Welter

As marketing and research coordinator, it’s Hilary’s duty to keep retailers informed about NRHA products and services and to help coordinate industry research projects. Additionally, Hilary is the voice behind NRHA’s and Hardware Retailing’s social media accounts. She appreciates a good book, spicy food, well-made horror films, craft beer and exploring new places near and far.

Check Also

Ace cybersecurity incident

Ace Hardware Reports Increase in Q1 2024 Revenues

Ace Hardware Corp. reported first quarter 2024 revenues of $2.1 billion, an increase of $51.6 …