Buying someone a gift card this holiday season? Beware of this scam

When a group of parents found out their children's first-grade teacher was celebrating a birthday in September 2022, they each pitched in to make it extra special.

"They all agreed we needed to give her something," Yolanda Bauza told NBC 6 in 2022. "She's so great. The kids love her. They gush about her all the time."

The class surprised their teacher with a customized book showcasing special messages from each of the students and a $375 gift card Bauza said she purchased at a local pharmacy.

"It just seemed more elegant, you know," she said about why they decided to buy a gift card instead of giving the teacher cash. "And I wanted it to be a VISA gift card just because she could use it anywhere."

A receipt provided to NBC 6 showed the card was purchased on Thursday, Sept. 8, 2022 at 6:30 p.m. 

Bauza said they gave the teacher the card the next day. But by the time the teacher went to use it on Saturday, Sept. 10, the money was gone.

"It was awful," Bauza said. "She sent me a text and she said that she went online ... and she saw where it was used."

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Gift card draining explained

While gift cards are an easy option for holiday gift-giving, experts warn against buying from racks in retail stores.

"Unfortunately, this is an all-too-common scam," John Breyault of the National Consumers League told NBC 6 in 2022.

Breyault explained that scammers will go to a retail store and record the numbers off the back of gift cards.

"They then take that number back and load it into software that will actually ping the servers to find out how much money has been loaded onto these cards," he said. "They just wait until somebody buys them, loads money onto them, and then as soon as they get an alert that that's happened, they use that information to buy merchandise and drain the funds off the card."

But getting your money back is not as simple as filing a fraud claim with a credit card company because the rules are different for gift cards.

"On gift cards, you don't have the same protection," Breyault said. "That's because they're not covered by the same laws that protect debit and credit cards."

Bauza said both she and the teacher reported the fraud to the company behind the gift card.

"At this point, we're just getting nowhere with it," she said.

So she reached out to NBC 6 Responds. The company looked into what happened and sent us the following statement:

“InComm Payments takes concerns from cardholders very seriously and continues to invest significantly in solutions to protect our customers. We do not comment on individual cases to respect the privacy of our customers, but we can share that we have contacted the cardholder with a resolution for their issue. If one of our customers believes they may be a victim of fraud, they should call the customer care number on the back of their card immediately so we can initiate an investigation. For more information on their cards or to check account balances, cardholders should visit their product’s official website, which is printed on the back of their card.”

Bauza said that's what they did, but it wasn't until after NBC 6 Responds got involved that the teacher received a call from someone at the gift card company, saying they were sending her a replacement card with $375.

"We're so, so, so happy," she said.

How shoppers can avoid the scam

Bauza said the incident taught her an important lesson about safeguarding against such scams.

"No more gift cards for me," Bauza said. "It’s just such an easy hack, that none of us would have thought of, but I guess people are sitting at home trying to figure out how to swindle other people."

If you're planning to buy a gift card, experts say it is always safer to do it online. But if you choose to go to a store, try picking one with well-sealed packaging toward the back of the rack or one that is kept behind the counter. Breyault said that help ensure there is less of a chance that someone tampered with it.

Also, take the time to closely examine the card and the packaging to see if it shows signs of being tampered with.

And finally, Breyault suggests considering giving cash instead of a gift card.

Falling victim to the scam isn’t entirely uncommon. A 2022 survey from AARP found that 73 million adults in the U.S. have experienced a form of gift card fraud.

Gift card and reload card fraud cost $228 million last year, according to the Federal Trade Commission, as first reported by TODAY.

Editor's Note: A version of this story was originally published in 2022.