Gift cards have become a popular choice for many when it comes to giving presents or making purchases, especially during the holidays. However, with the rise in popularity of gift cards, there has also been a surge in gift card cloning scams. These scams involve criminals copying the information from legitimate gift cards and using it to drain the funds before the unsuspecting recipient or purchaser has a chance to use them.

Attorney General Kris Mayes announced last week an ongoing investigation into an organized retail theft scheme related to gift card cloning.

Agents from the Arizona Attorney General’s Office in partnership with the Arizona Retailers Association and with the help of law enforcement partners, recently seized thousands of cloned gift cards and other merchandise after serving search warrants and arresting eight individuals as part of an alleged scheme to defraud retailers and consumers.

“The agents and investigators that make up the Organized Retail Theft Task Force in the Attorney General’s Office have demonstrated our commitment to protecting Arizonans from fraud by uncovering this complex gift card cloning scam,” said Attorney General Mayes. “The successful seizure of thousands of cloned cards and the arrest of several individuals reflects my office’s unwavering dedication to stopping organized retail theft across Arizona.”

“I am grateful for the support the Arizona Retailer’s Association and our law enforcement partners provided to the Attorney General’s Office in this operation,” added Mayes. “Together, we will pursue and stop criminals engaged in these activities wherever they occur in our state.”

How Gift Card Cloning Scams Work

Gift card cloning happens when fraudsters take gift cards from stores, copy the magnetic strips, and return the copied gift cards to store shelves. When a consumer buys the card, the fraudster uses the copied magnetic strip to drain the funds. The unsuspecting victim is left with a worthless gift card, while the criminals walk away with the stolen money.

These scams can occur at various stages of the gift card’s life cycle. It could happen when the card is being activated, during the purchase process, or even after the gift card has been loaded with funds.

Warning Signs of Gift Card Cloning Scams

There are several warning signs that can help you identify potential gift card cloning scams:

1. Tampered Packaging: Always inspect the packaging of the gift card before purchasing or giving it as a present. Look for any signs of tampering, such as broken seals or scratched-off PIN numbers. If anything seems off, it’s best to choose a different gift card or report your concerns to the store management.
2. Unusual Activation Process: Be cautious if the activation process of the gift card seems unusual or different from what you’ve experienced before. Scammers may try to distract or confuse you during the activation process to obtain the necessary information.
3. Unfamiliar Retailers: Avoid purchasing gift cards from unfamiliar or unknown retailers. Stick to reputable stores and online platforms to reduce the risk of falling victim to gift card cloning scams.
4. Unsolicited Gift Cards: If you receive a gift card out of the blue or from an unknown source, be wary. Scammers may send unsolicited gift cards as a way to trick you into providing personal information or to gain access to your financial accounts.
5. Balance Discrepancies: Regularly check the balance on your gift cards to ensure there are no unexpected deductions or discrepancies. If you notice any discrepancies, contact the gift card issuer immediately to report the issue.
6. Double-Check The Card Numbers: Consumers can avoid being defrauded by double-checking to ensure that the number on the back of any gift card matches the number on the receipt. If the numbers do not match, that is a sign the card has been cloned.

Protecting Yourself from Gift Card Cloning Scams

Fortunately, there are several measures you can take to protect yourself from gift card cloning scams:

1. Purchase Gift Cards from Reputable Sources: Only buy gift cards from legitimate and well-known retailers. Avoid purchasing them from online auction sites or individuals, as they may be more prone to selling cloned or fraudulent gift cards.
2. Scratch-off PIN Codes Securely: When purchasing gift cards with scratch-off PIN codes, ensure you do it securely. Avoid scratching off the PIN code until you are ready to use the gift card to minimize the risk of it being compromised. Consumers should also look for signs of tampering:  such stickers placed over activation codes or damage to packaging or faint scratches on the card from being swiped through a card reader.
3. Keep Gift Card Receipts: Always keep the receipts for your gift card purchases. In case of any issues or discrepancies, the receipt can serve as proof of purchase and may help resolve the situation more efficiently.
4. Register the Gift Card: Some gift cards offer the option to register them online. Registering your gift card can provide an additional layer of security and make it easier to track and report any fraudulent activities.
5. Use Gift Cards Promptly: To minimize the chances of your gift card being compromised, use it as soon as possible. The longer the gift card remains unused, the more time scammers have to clone it and drain the funds.
6. Cards Sold Behind the Counter: For extra precaution, consumers may consider purchasing gift cards stored behind the counter or near cash registers.

Reporting Gift Card Cloning Scams

If you suspect that you have fallen victim to a gift card cloning scam, it is crucial to report the incident immediately. Contact the retailer or gift card issuer and provide them with all the relevant details. Additionally, report the scam to your local authorities and inform them of the fraudulent activity. By reporting these incidents, you increase the chances of catching the scammers and preventing them from defrauding others.

The Future of Gift Card Security

As gift card cloning scams continue to evolve, so does the need for improved gift card security measures. Gift card issuers and retailers are working tirelessly to enhance security protocols and implement advanced technologies to prevent scams. This includes the use of unique identifiers, encryption methods, and transaction monitoring systems. However, it is essential for consumers to remain vigilant and stay informed about the latest security practices to protect themselves from fraudsters.

Resources for Further Information and Assistance

If you want to learn more about gift card cloning scams or seek assistance, here are some valuable resources:

• Federal Trade Commission (FTC) – The FTC provides information about various types of scams, including gift card cloning scams.
• Consumer Financial Protection Bureau (CFPB) – The CFPB offers resources and tools to help consumers protect themselves from financial fraud.
• Gift Card Granny – Gift Card Granny provides information on discounted gift cards and tips for safe gift card usage.

Gift card cloning scams pose a significant threat to both consumers and retailers. By understanding how these scams work, being aware of the warning signs, and taking proactive steps to protect ourselves, we can reduce the risk of falling victim to such fraudulent activities. Remember to purchase gift cards from reputable sources, keep an eye out for any suspicious activities, and promptly report any incidents of gift card cloning scams.

If you believe you have been the victim of fraud, you can file a complaint by visiting https://www.azag.gov/complaints/criminal. If you need a complaint form sent to you, contact the Attorney General’s Office at (602) 542-8888.