Jesse Schmidt of the Better Business Bureau of South Dakota is warning gift card buyers to be on alert. She said scammers are grabbing cards off the rack, scratching off the film that covers the pin number and saving it. They then cover their tracks with a replacement sticker they can buy online.
Thieves then monitor the card online to see when it's been activated. Once money is loaded on, scammers drain it of all funds.
To avoid losing money, Schmidt recommends consumers buy packaged or Visa cash cards instead. Buying gift cards directly from companies or smaller businesses and going for cards towards the back of the display is also recommended. If all else fails, Schmidt reminds everyone of the benefits of cold hard cash.
Schmidt said "They see, boom, there's $100 on that gift card. They're going to go online, and they're going to spend it or load it onto a different card and sell it online."
Experts said Americans will spend more than $26 billion on gift cards this year. Gift cards are believed to be the second most given present in the U.S. right behind clothing.