How Do Gift Card Scams Work?

It’s that time of year again—a tidal wave of gift cards is swiftly approaching, both sent and received, this holiday season. We may even see more gift cards than usual this year due to the ongoing pandemic, as both individuals and small businesses face significant financial insecurities and uncertainties.

But be aware: it is also the season of gift card scams. How do gift card scams work? First, it’s important to understand what these scams are.

What is a Gift Card Scam?

Gift cards are incredibly convenient for gift-giving, as they allow you to gift money for a specific purpose or retail location, but allow the card recipient to choose exactly what they want. Unfortunately, giving one of these may put you at risk of a gift card scam.

Gift card scams are a popular, simple method for scammers to steal your money. And because gift cards are paid for up front and function like cash, you very likely cannot get your money back.

How do Gift Card Scams Work?

Gift cards seem fairly straightforward, and they have security features like packaging and codes, so how do gift card scams work?

Many gift cards are sold not from behind the counter, but out on store displays, where they’re easily accessible to customers—and to scammers. Scammers can then remove the security tape on the back of the cards in order to access the activation code and PIN number specific to that card, and then cover up the PIN with a similar silver tape to the security tape they removed. This kind of security tape can be readily purchased online.

Then customers may purchase these gift cards, unaware that the activation codes and PIN numbers have already been recorded. When they go to use the card, they may find that the money is already gone.

The Gift Card Scam Target Investigation

Target is currently being investigated by a law firm for potentially selling iTunes gift cards without adequate protections against scammers. Indeed, these gift cards may not even be wrapped in protective packaging and lack the necessary security measures to prevent scammers from accessing the silver security tape on the back that blocks the activation code and PIN.

A lawsuit was recently filed against Target within the state of California, alleging that the Minnesota-based retail giant has knowingly sold gift cards prone to this kind of tampering from scammers for years.

The plaintiff claims that they purchased six $100 iTunes gift cards from a Target store, activated by the store upon purchase, but soon found that the cards had been depleted of all of their funds before they could use them. When the plaintiff reported the issue to Target, the company allegedly denied the plaintiff’s refund request and encouraged them to report the issue to the police instead.

The lawsuit claims that this is not an isolated incident. “Target [has] received enough customer complaints alerting Target that its iTunes Gift Cards were being tampered with and customers were being denied access to the money they loaded on the cards,” the plaintiff alleges, but the company has failed to adequately respond to this issue with proper security measures as well as refunds for those affected.

The lawsuit specifically alleges that part of the issue is that Target employees are not given adequate training to detect evidence of tampering with iTunes gift cards or other gift cards that would indicate a potential gift card scam at play.

How to Get Money Back from a Gift Card Scam

It can be very difficult to get money back from a gift card scam, and in many cases, it may even be impossible. Contact the store from which you purchased the card right away, but also contact the company that issued the card to see if they can do anything about your issue. Some companies will not return gift card money no matter what, but others may be more open to your plight.

One thing that will help you get money back from a gift card scam is keeping your receipt from the original purchase of the card and keeping the card itself as evidence. Receipts are important to keep and check for debt card information violations as well.

Filing a Gift Card Scam Lawsuit

If you have purchased an iTunes gift card from a Target store but have since discovered that the card had already been used and/or deactivated prior to you or the card’s recipient using it, you may be able to join this class action lawsuit investigation and pursue compensation.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork or you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.