Retail and Drugstore Chains Hit by at Least 5,000 Fraudulent Purchases
By Keemia Zhang
Late last month, Los Angeles County Supervisor Janice Hahn called upon corporate retailers – including CVS, Walgreens, and Target – to protect their customers from a gift card-draining scam that has targeted at least 5,000 purchases. If a scam like this can take in an official of Los Angeles County, it is necessary to get the word out and to require that retailers protect customers from such fraud. It could happen to anyone.
The scammers operate using two methods; the first involves attaching the barcodes of their own cards imperceptibly to the cards sold at stores, which results in customers loading the scammer’s gift cards instead of their own. The second sees a scammer collect the details of a gift card while in-store and utilize the money themselves when the card is purchased.
Supervisor Hahn became a victim of the scam after she purchased a CVS gift card for her nephew’s birthday – but was unable to use her funds after they were drained.
Supervisor Hahn penned a letter to President of CVS Karen Lynch, expressing her concern for customers “who are barely scraping by who can’t afford to be ripped off.” Hahn also noted that the store had no practices to protect their customers from the scam and suggested that the retailer put gift cards behind glass or a cashier’s counter, similar to other anti-theft measures taken to protect valuable products.
“When those items are stolen, it hurts your bottom line. But when gift cards are used to scam shoppers, it hurts our bottom line.” Hahn said. “Yet you offer no protection for us.” The supervisor also encouraged CVS to train checkout staff to recognize fake barcodes and add warning signs on gift card racks.
Earlier in December, a Sacramento man was arrested as part of a sheriff’s department retail crime sting – police retrieved 5,000 Target and Apple gift cards purchased from 54 stores across 12 California counties. Authorities estimated that thousands of tampered gift cards remain for sale as part of a state and nationwide scam, targeting unaware consumers whose money is “siphoned into an off-shore account within seconds,” according to the Sacramento County Sheriff.
Shoppers who continue to buy gift cards were advised to examine cards for scratches and scuff marks that could indicate scammer alternations. In a statement to USA Today, Target assured consumers it would encourage team members to “stay alert” and work with their “centralized cyber fraud team” to educate their staff on spotting suspicious guests.
Supervisor Hahn’s letter called on “retailers like CVS, Target, Walgreens and others, to take immediate steps to protect their own shoppers from these scams. It should not be up to consumers to defend themselves from scams when you have the power to prevent them altogether.”