LA County Supervisor Hahn urges retailers to protect consumers from gift card draining scam

Los Angeles County Supervisor Janice Hahn Thursday urged retailers to protect consumers from a growing gift card scam problem amid holiday shopping.

At a morning news conference in a shopping center, Hahn shared how she fell for this type of scam after buying a gift card at a CVS for her nephew’s birthday, which was then drained before he could use it.

She urged retailers to place gift cards behind glass or behind a service desk while scams continue. Hahn also encouraged retailers to better train check-out clerks to recognize fake barcodes placed on cards or add warning signage on gift card displays.

“I am fortunate,” Hahn said in a statement. “What I lost on this gift card I was easily able to repay in cash to my nephew. But I am worried about the people who are barely scraping by, who can’t afford to be ripped off.

The scam, known as “gift card draining,” works in two ways.

In the first instance, scammers attach a barcode from a card they already have to an unsold gift card in a store. When someone buys the tampered card and loads money onto it, they are loading money onto the scammer’s card.

In the second instance, a scammer steals the details of a legitimate gift card, and then places it back on a store rack. That scammer can then track when the card is bought and loaded and then quickly drain the money, according to Hahn’s office.

“I am calling on retailers like CVS, Target, Walgreens and others, to take immediate steps to protect their own shoppers from these scams,” Hahn said in a statement. “It should not be up to consumers to defend themselves from scams when you have the power to prevent them all together.”