DMV LOCAL RECAP: Beware of Gift Card Draining Scam This Holiday Season

The holiday season is here, and while we are busy checking off our shopping lists, scammers are working overtime to steal our joy—and our money. A new scheme known as “gift card draining” is making rounds, and it’s something every shopper in the DMV needs to be aware of before heading to the checkout line.

What is Gift Card Draining?

This scam is as simple as it is devious. Scammers go into stores and grab unpurchased gift cards off the racks. They carefully scratch off the back of the card to reveal the redemption code and PIN. Once they have that information, they cover the code back up—often with a replacement sticker—so the card looks brand new. They then put the card back on the rack and wait.

When an unsuspecting customer buys that card and loads money onto it at the register, the scammer’s software alerts them immediately. Because they already have the access codes, they can drain the funds online before you even leave the store or have a chance to gift the card to a loved one. It’s a sophisticated hustle that leaves you with a worthless piece of plastic.

How to Protect Yourself

So, how do you keep your money safe? First, inspect every gift card carefully before buying it. Turn it over, look at the sides, and check for any signs of tampering. If the packaging looks ripped, or the scratch-off strip looks like it has been replaced or damaged, put it back and alert a store employee.

Experts recommend avoiding cards on open racks altogether. Instead, ask for gift cards that are kept behind the counter or in locked cases, as these are much harder for scammers to tamper with.

Advice from D.C. Officials

D.C. Attorney General Brian Schwalb’s office is urging residents to be vigilant. They suggest using a credit card rather than cash or debit when purchasing gift cards. Credit cards often offer better fraud protection, making it easier to dispute the charge and get your money back if you do fall victim to a scam.

If you suspect you’ve encountered a compromised card or have fallen victim to this scam, you can contact the D.C. Department of Insurance, Securities, and Banking at 202-727-8000