Gift Card Draining Scam

Overview

Scammers secretly record or expose the codes on gift cards still sitting on store racks, then drain the funds the moment an unsuspecting shopper buys and activates the card. The FTC reports that gift cards were mentioned in at least one-quarter of recent fraud complaints, and the D.C. Attorney General's office has issued a warning about this "draining" scheme this holiday season.

How It Works

Before a gift card is ever purchased, a scammer takes it off an in-store display rack and either scratches off the back panel to expose the redemption code (then carefully resealing it) or uses a handheld scanner to capture the card number and PIN through the packaging; some scammers also place a fake barcode sticker over the real one so that any value loaded at checkout actually routes to a card the criminal controls. The card is then returned to the rack looking untouched. The scammer periodically checks the balance, including by calling the retailer's 800 number, to see when the card has been activated. Once activated, the scammer accesses the card online and steals the money, or clones the card, or diverts the funds to their own account, leaving the buyer or gift recipient with an empty or worthless card. Separately, no legitimate business or government agency will ever demand payment via gift card, and scammers may impersonate law enforcement, the IRS, tech support, or a family member to pressure victims into paying this way.

Red Flags

• A gift card's packaging looks damaged, opened, resealed, or shows a scratched-off or exposed PIN
• You can feel or see a sticker layered on top of the card's real barcode
• The card shows no funds or a drained balance after purchase and activation
• Anyone (claiming to be law enforcement, the IRS, tech support, or a relative) demands payment specifically via gift card
• A website offering to check your gift card's balance asks for the card's ID number and PIN or security code

Real Examples

• The D.C. Attorney General's office issued a December 2025 news release warning that scammers take an unpurchased gift card off the rack, scratch off the code, and cover it back up before it's bought and drained online.
• The BBB shared a report on its Scam Tracker describing a gift card whose packaging looked untouched but had a sticker hidden under the barcode window that redirected funds away from the real card, leaving the card with no funds on it.

Where It Spreads

How to Protect Yourself

• Before buying, run your finger over the card's back and barcode to check for signs of tampering or a sticker applied on top
• Buy gift cards at checkout counters, from cards locked away at stores, or directly from the retailer's official website instead of from open floor racks
• Save your receipt and original packaging, which are critical if you need to report fraud to the retailer or the FTC
• Register the gift card online if the retailer offers that option, and don't delay using the balance
• Never purchase or send gift cards to pay a bill, fine, debt, or any government agency — no legitimate business or government agency will ever demand payment via gift card
• Check gift card balances only through official websites or phone numbers printed on the card, not through links sent by text, email, or social media

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