LAS VEGAS (KTNV) — Gift cards are popular and convenient presents, but for some unsuspecting shoppers, they’re becoming costly scams.
A KTNV viewer recently experienced this firsthand after purchasing two $50 Sephora gift cards for his wife and daughter. When they tried to use the cards, both had a zero balance. After weeks of back-and-forth with the company, the viewer was eventually refunded. But for many victims, getting their money back isn’t so easy.
Las Vegas resident Karla Taylor frequently shops at Sephora and says she hasn’t been scammed, but she knows the risks.
"I've always had good experiences, but I’ve heard about scammers scanning barcodes or peeling off stickers and making it look like a brand-new card. That’s what makes me nervous," Taylor said.
Experts say gift card fraud is a growing issue. Frank Teruel, Chief Operating Officer at Arkose Labs, a cybersecurity company that helps major retailers fight fraud, says scammers take advantage of how gift cards are sold and stored.
"The gift card industry is worth $200 billion, and in 2023 alone, about $200 million was lost to fraud," Teruel explained.
Scammers typically steal gift card numbers from racks in stores, waiting for an unsuspecting customer to load money onto them. The scammers drain the balance before the buyer or gift recipient can use the funds.
"They know this is unchaperoned money for a while," Teruel said.
The issue is that many gift cards sit unused for weeks or even months, giving scammers plenty of time to act.
"You grab a gift card, load it up, put it in an envelope, and give it to someone weeks later. That delay creates a huge opportunity for scammers to take the money before it’s even used," Teruel added.
How to Protect Yourself
If you’re buying a gift card, experts recommend taking precautions:
- Check for tampering – Look for peeled stickers or scratched-off barcodes.
- Buy directly from the retailer’s website – This reduces the chances of fraud compared to purchasing from store racks or third-party websites.
- Use the gift card quickly – Don’t let it sit unused for long periods.
- Pay with a credit card – This provides an extra layer of protection and a better chance of disputing fraudulent transactions.
Taylor says hearing about these scams makes her rethink giving gift cards altogether.
"Yeah, it makes me wonder… maybe I should find another option," she said.
Teruel says that retailers are starting to tighten security on gift card displays to prevent theft, acknowledging that while easy access was convenient for customers, it also made scamming too easy for thieves.
If you buy a gift card, check the balance right away. If there’s an issue, report it to the retailer immediately.
