New open-loop gift card scam

We just became aware of a new scam involving open-loop gift cards.

Gift card scams involving closed-loop, or retailer specific gift cards (like Target or Wal-Mart) are common.  Thieves can easily get the information necessary to identify and duplicate the card from the outside of most of these type of gift cards, which are displayed on racks accessible to anyone in the store.  They wait for the gift cards to be activated and then quickly duplicate them and drain them, before the purchaser has a chance to use them.

But this hasn’t been a problem for open-loop (Visa/MasterCard/American Express) gift cards as the information necessary to identify the gift card is well hidden away inside the tamper-proof packaging.  Before we discovered this scam, we were not aware of ANY verified repeatable scam involving open-loop gift cards that didn’t involve rogue store employees, a relatively small risk.

But it seems that thieves have found a new way of scamming these cards.  By applying a sticker to the back the replaces the bar code that is there, which is used in activation, they can redirect the activation over to another card, one they have possession of.  When the purchaser tries to use the card, they find that it has not been activated.

If you buy an open-loop gift card from a place in a store that is easily accessible to anyone, be sure and inspect it carefully to look for any indication the activation bar code on the back of the packaging has been replaced.  If you can lift a corner of this sticker off and see another one underneath, report it to the store employees.  Your best bet is to buy ANY gift cards only from stores that keep them behind the counter.