As gift cards gain in popularity at the holiday season, the drawback is how they are subject to elaborate scams. (Photo courtesy of Wisconsin Senior Medicare)

Over the years, gift cards have become a favorite gift. You don’t have to worry about color or size, and there is one for every taste. Shipping costs are minimal, and you can purchase them almost everywhere. If you receive a gift card for somewhere that you do not shop, or for a store that’s not in your area, there are even websites where you can sell or exchange them for cash.

However, gift cards can have their drawbacks. Some people think (like cash) they are cold and impersonal. One local store in my area has gift cards for places that are more than 100 miles away from where I live.

The largest drawback for gift cards is now they are subject to elaborate scams. So, if you are thinking about purchasing gift cards this holiday season, watch out for these top three scams.

1. Stolen Card number

Thieves remove gift cards from a display. They record the card number and put the card back on display. Scammers then wait until a customer buys the card and checks online for a dollar balance to appear. The card information is then used online or sometimes a duplicate card is made to use in the store. This scam works best when there are a small or controlled number of cards available, like at smaller merchants.

In larger stores, the gift cards near the register or on end caps are the most likely targets because they will be purchased more quickly.

Watch for people who try to push a particular card for sale. In larger displays, compromised cards are most likely to be at the front of the group. Choose a card from the middle or back or from an area of the store that is less frequented. These are cards that would cause thieves to wait longer for their redemption.

2. Tampered packaging

Some manufacturers have been adding special packaging or scratch off pin numbers to prevent thieves from just being able to look at the cards and stealing the numbers. While it has deterred some theft, some thieves have continued to figure out ways to access the money.

Some open up the packages, take the numbers and try to reseal them in hopes that hurried shoppers won’t notice. Some scratch off the covering on the pin number to access it and either leave it exposed or try to cover it back up. Either way, once you purchase the card and load it with money, they are ready to steal it.

Watch for packaging that looks like it may have been tampered with checking with other cards in the rack to see that they look the same. Checking the seams of the packaging for misaligned or re-glued packaging could prevent you from giving an empty gift card.

Make sure the scratch-off covering on the pin number looks untampered. If you find packaging that looks suspicious, give the cards to the cashiers and choose another one, preferably from the back of the display.

3. Switched at Checkout

While most store employees are hard-working, honest individuals, some are not. This scam works when the store employee is in on it too. You hand your card to the checkout person for purchase and activation. The cashier then activates a different card and hands you back the inactivated card. (Sometimes they activate your card, but hand you back an inactive one) either way, the store clerk is collecting activated cards loaded with money.

Watch for clerks that seem distracted or that try to distract you. Keep your eye on the card and make sure it is handed back to you immediately after activation. Double check that the gift card number on the activation receipt is the same as the number on your card. If not, call for a manager.

Just remember these tips when buying gift cards this holiday season:

1. Grab a gift card from the middle of the display, not the top
2. Inspect the gift card packaging before purchasing
3. Check the activation receipt for matching numbers and amounts
4. Check the balance in private
5. Only buy and sell gift cards from reputable sellers/resellers that offer guarantees

— Everyone loves getting gift cards but beware the scams —