HOUSTON – After a major gift card fraud bust tied to nearly $14 million in losses, investigators say the scam has now made its way into the Houston area.
Law enforcement is warning shoppers to take a closer look before buying gift cards, especially from in-store racks that may appear harmless at first glance.
How the gift card scam works
Rows of gift cards lining store kiosks may look untouched, but investigators say criminals are quietly tampering with them before they ever reach the checkout counter.
According to Scott Hamilton with the Texas Financial Crimes Intelligence Center (FCIC), thieves remove gift cards from store racks and take them to another location.
“They pull the gift cards off, steal them, take them back to a different location, and then they’ll very meticulously open the package,” Hamilton said.
Once opened, thieves copy the card number and security information from the back of the card and enter it into a computer program. They then reseal the packaging and return the cards to the store—often placing them back on the rack at eye level.
When an unsuspecting shopper later buys and activates the card at checkout, the thieves receive an alert and quickly drain the balance.
“By the time somebody opens it, it’s already been emptied and nobody knows,” Hamilton said.
How to spot a tampered gift card
Police say the key to avoiding the scam is closely inspecting the packaging before you buy.
Shoppers should avoid cards that show:
- Frayed or uneven edges
- Excess glue
- Packaging that looks re-pressed or resealed
Investigators also say thieves often take cards from the bottom of the rack, then return them to more visible spots.
“If it doesn’t look like every other one of them, I would shy away from that one,” Hamilton said. He also recommends grabbing gift cards from the back of the rack, rather than the front.
Arrests made in statewide investigation
Authorities recently arrested three men found with more than 400 gift cards, allegedly connected to nearly $14 million in fraud statewide.
A new Texas law now allows police to arrest suspects simply for possessing multiple tampered or unactivated gift cards, even before a victim reports a loss. Those charges can rise to a state jail felony.
What to do if you’re a victim
Police say if you purchase a gift card and discover the balance has already been used, you should:
- Report it to the store immediately
- File a report with your local police department
Investigators stress that every report matters, regardless of the dollar amount.