How your gift card can be hacked



Posted on December 16, 2010 at 11:46 PM

Updated Friday, Dec 17 at 12:26 AM

There's nothing that changes your life like having a little princess. Kirsten Johnson is joyfully learning that fact each and every day with her daughter Autumn Gracey.

"We're a little tired as would be expected, but we are enjoying it," said Kirsten.
Gracey Johnson, Kirsten's grandma, put $200 on a Macy's gift card for the new mom in May. In mid July, Kirsten double checked the balance of the card.

"I was checking the balance and it said zero," said Kirsten.

The folks at Macy's told Kirsten's dad that someone had hacked into the card, draining its value. That's right. Your gift card can be compromised pretty easily.

"The scam artists are trying to stay one step ahead and, when your full time job is trying to steal money from people, you are going to come up with something every once in a while," said Dave Horn with the Federal Trade Commission.

He says scam artists are on the Internet selling all kinds of devices, like scanners, to steal the bar code information off the cards at stores. What happens next?

"I make a fake gift card. As soon as somebody buys that gift card and activates it, then I keep checking to see if it's activated.  Once it's activated, I go out and start to buy stuff with it," said Horn.

If you get a gift card, make sure it has a scratch-off code that is still untouched. If you have the opportunity, do not activate the card until you plan on using it. You can also buy the card online and have it sent to your home by the store. That should reduce your chances of getting hacked.

To illustrate another point, Dave shows me a $20 bill and says "The best card we could come up with is this. Nobody can hack into it."

In Kirsten's case, Macy's said the card was red flagged because the thieves tried to buy another gift card with her gift card. Fine, but the company was supposed to provide Kirsten with a refund back in July.

"No updates, no status, so my dad kept checking back," said Kirsten.

I got a hold of Macy's and the company came through with $200 right away and a new gift card for her troubles. Hopefully, there won't be any problems with this one.

"I think they came around and trying to resolve it," said Kirsten.
Your best bet, if you are giving a gift card, is make sure it is used within a few days of purchase.