They are easy and desirable gifts, but gift cards come with risks. Some people are finding out their new gift card has zero balance.
That's what happened to Let ABC15 Know viewer, Dylan. He helped out his grandma and she gifted him a $50 Walmart gift card as a "thank you." But, when he went to check the balance on the card online it read zero.
Dylan checked with his grandma. She still had the receipt which showed $50 was paid for the card. Dylan said the card itself didn't have any obvious signs it had been tampered with.
"The pin was not scratched. She gave it to me fresh, brand new," Dylan explained.
He contacted Customer Care with his concerns. In an email to Dylan, the team stated they could not recover or refund the gift card because they could not "determine misuse of the card" adding they are "not liable for lost, stolen, or compromised funds."
Frustrated, Dylan reached out to Let ABC15 Know. We reached out to Walmart and they refunded the gift card funds to Dylan in the form of a direct credit. The problem was solved for Dylan, but the problem of gift card funds being stolen is a problem impacting all retailers - not just Walmart.
A recent Federal Trade Commission report found more than 41,000 cases of gift card draining were reported in 2023. Those cases totaled $217M in losses for consumers.
The problem is so large that the Department of Homeland Security is now stepping in.
The department launched a task force to combat "card draining." That's where thieves use stolen or altered card numbers to siphon off money before the owner can spend it.
Meanwhile, lawmakers are also taking action. Gift card draining was the focus of U.S. Senate hearings earlier this year and Maryland just passed the nation's first law targeting card draining. The law mandates secure packaging for most gift cards sold in person.
Action is something Dylan hopes happens at retailers across the country.
"Figure out a way where you can get a gift card sold that's not going to get skimmed," he advocated.
If you're a victim of gift card draining, first call the number on the back of your gift card! Report the incident to the gift card issuer. Secondly, see if you can get your funds back from the company - you'll need a receipt and likely have a finite amount of time to report potential fraud so don't wait. Also, report fraud to the Federal Trade Commission. Consumers can do that online.
Tips to potentially avoid card draining:
- Avoid a physical card. It's tough to know which cards may or may not have been tampered with, and a virtual card eliminates that risk. You could also opt to gift cash instead.
- If you do purchase a physical card, buy one near the register or behind the counter in a store.
- Gift card recipients should check the balance and register a card immediately after purchase/receipt to lower the risks of draining.
