Gift cards are a super convenient way to show someone that you care. They are great gifts for people in your life who are difficult to shop for.
You might have even received a few of them for Christmas. With gift cards being such a popular alternative to fighting the massive crowds at the mall, they're also popular targets with cybercriminals.
It's not just traditional gift cards criminals are after either. They are also going after loyalty point programs.
Are your loyalty points protected?
The 2018 Aon cybersecurity report said businesses like airlines, retailers and the hospitality industry need to beef up security. That's because cybercriminals are starting to focus their attacks on stealing loyalty points and funds from gift cards.
Loyalty point theft puts both businesses and customers in a bad predicament. That's because it's yet to be determined if loyalty points are covered by business insurance policies.
Aon's Brian Rosenbaum said, "The question is: Who are they stealing from? And what are they stealing?"
When loyalty points are stolen, are they considered a loss of property from the provider? Or is it a loss of property from the customer?
How criminals are targeting gift cards
In the past, these scams involved a criminal sending random people emails or texts offering deeply discounted gift cards. What they were really doing was trying to get the victim's credit card information. There never actually was a gift card. That's just one example of these attacks.
What's happening now is, the criminal goes to a retail store and writes the gift card number down while it's still for sale. They then scratch off the strip covering the security code on the back of the card. After they write down the security code, they use a replacement strip to cover it and walk out of the store. Scandalous!
Once you purchase the card and load it with money, the scammer receives notification that funds are available. They get these notifications from software that frequently checks card balances online.
To stay ahead of authorities, the thief can then begin a form of money laundering. One popular way is to sell an item they don't own yet on sites like Craigslist or eBay. The scammer can then buy that item online with the stolen gift card, have it shipped directly to the purchaser and receive clean money from the sale.
Be cautious when buying gift cards
If you go to a retail location to purchase a gift card, make sure they are stored behind the counter. If the store has them out on a rack, make sure they are in a sealed package that won't allow someone to access the security code. Then, make sure to thoroughly inspect the package for tampering. If it seems like someone has messed with it, do not buy it.
Change the PIN ASAP
If it's possible, change the PIN as soon as you can after purchasing a gift card. Register the card immediately and then change it. Make sure to tell the recipient what the new PIN is and why you changed it. Also, tell them they should use the card ASAP.
It's best to purchase the gift card directly from the retailer on its website. The scammer won't be able to get their hands on those cards.
Here are 3 more dangerous online scams that you need to avoid
While everyone agrees online shopping is convenient, one of the biggest drawbacks is not feeling secure. A big worry is hackers using retail tools to trick you.