by Alex Palmer | January 02, 2018
The incentive industry has long stressed the importance of ensuring the security of gift cards, and a new report from Consumer Reports underlines many of these concerns. The consumer publication underlined the variety of threats consumers are likely to encounter when purchasing a gift card at retail. 

These include the most basic method of a scammer taking cards off the rack, writing down their numbers, and scratching off the strip on the back to get the security code (then replacing the strip so a buyer might not notice it's been tampered with). Then when a shopper buys it and loads money onto it, the hacker is alerted. 

"The crooks can see as soon as someone activates the card, because they've automated all this with software that periodically checks the card balance via the internet," David Farquhar, a unit chief within the FBI's Criminal Investigative Division, told Consumer Reports.

Another method used by gift card thieves is to launder the funds on the card. For example, they may place an ad on an online marketplace or auction website offering discounted merchandise, which they then buy with the "dirty money," pocketing the "clean money" sent by the unwitting deal-seeker.

The report also pointed to botnet attacks as a gift card hazard, with hackers using bots to try out millions of combinations of gift card account numbers and stolen PIN passwords to attempt to log into online gift card accounts. 

Among the strategies to avoid these security issues, Consumer Reports suggests, are to buy gift cards online directly from a retailer, not to buy in-store cards where the PINs and numbers are easily accessed, and to change the card's security code as soon as you purchase it. For those giving cards to employees or sales staff as part of an incentive program, the solution is to work with reputable suppliers who have strong security measures of their own in place.