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Gift card draining scams: How they work and how you can report one

A report from the Better Business Bureau shows gift card scams have been on the rise, up 50 percent in 2023 compared to the year prior.

CLEVELAND — Marty Kruszynski said his wife was filled with joy when her coworkers gave her a gift card on her final day of work before retirement. On the card was $400.

"She was very, very tickled and very, very happy," said Kruszynski.

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When Kruszynski looked at the gift card, he said there was a website listed on the back, so he hopped on the computer and went to that site.

"It implored you to enter the card number and security code to check your balance or check your status of the card, so that's exactly what I did," Kruszynski said.

He said a pop-up then appeared on his computer screen. It said, "technical difficulties."

"As I found out later, at the very moment I was doing that, some group was taking all of the money out of that gift card account," said Kruszynski. "So, it went from $400 to 20 cents."

Since 2020, the Federal Trade Commission reports more than $690 million dollars have been lost due to gift card scams. A report from the Better Business Bureau shows gift card scams have been on the rise, as they were up 50 percent in 2023 compared to the year prior.

"We've been made aware that there are people going into stores and stealing gift cards that are yet to be activated," said Lora Miller with the Ohio Council of Retail Merchants. "Upon activation, the money is withdrawn from the account and it goes to the thieves account."

Miller also noted these scams hurt not only the consumer, but businesses, as well. 

"It's a loss to both because it's a loss of confidence to the retailer because the customer automatically assumes they've been scammed by where they purchased the card," said Miller. 

When purchasing a gift card, the Better Business Bureau recommends running your finger over the back of the card. This is to feel if a sticker has been applied. Scammers sometimes put a sticker with a printed barcode over the real barcode. They also suggest not buying a card whose packaging is damaged and to be wary of websites that offer to check your gift card's balance.

In Kruszynski's case, he called his state representative Bill Roemer to report the scam. Ultimately, with the help of the Council of Retail Merchants and Ohio Attorney General Dave Yost's office, they were able to get his wife's money back.

Roemer said this case has led him to consider legislation to help prevent these types of "gift card draining" scams. 

"We right now have legislation dealing with retail theft where people go into Home Depot or Lowe's and steal on request and then resell it on Facebook Marketplace," said Roemer (R-Richfield). "This is something that would fit very well with that type of legislation."

Yost stopped short of calling this specific scam a trend in Ohio, but he urged anyone who is scammed to report it to his office.

"And look, I know you find out or you figure out that you got taken and you feel like an idiot," said Yost. "Who wants to call the cops and say 'hey, I'm really stupid and this guy took advantage of me?' It's not your fault. It's the crook's fault."

If you need to report a scam to the Ohio Attorney General's Office, you can do so HERE.

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