Here's Why You Should Never Buy a Gift Card From a Display Rack

Scammers are getting creative and finding new ways to steal money.

Gift cards are convenient. But before buying your next gift card, you should consider the best place to purchase it. Your favorite grocery store or big-box retailer probably has many gift card display racks throughout the store. While this is a simple way to buy gift cards at the last moment, you may unwittingly purchase a gift card that a scammer has already used.

Scammers are stealing gift card funds

While gift cards are unusable until activated and loaded with funds, you can still fall victim to a gift card scam when purchasing a brand-new gift card at the store. Scammers are getting more creative, and display rack gift cards have become a common target for them. These display racks are often far from the checkout counter, so it's easier to access them without being noticed.

Scammers are known to tamper with the card packaging to steal information. They record the gift card number and PIN and cover up their tampering, so the cards look untouched. While the tampered-with cards hold no value until an unsuspecting customer activates them, scammers use technology to steal the funds before customers use them.

Computer programs allow scammers to follow the cards they tamper with and get an alert when a card has been activated. Once they find out a card is active, they can quickly drain the funds before the recipient uses the card themselves.

Gift card theft may go unnoticed for a long time because it's not unusual for people to keep unused gift cards in their wallets for months or to give someone a gift card long after the card has been bought. But the funds may have already been drained by a thief. For this reason, it's best to avoid buying gift cards from display racks if possible.

Do this instead to play it safe

Luckily, there are a few ways to avoid being hit by this scam.

• Be selective about where you buy gift cards: While it's convenient to shop gift cards found on display racks, there is a risk of fraud. Instead, choose to buy cards that are kept behind the counter. Buying gift cards from your favorite retailer's checkout counter is safer. Another option is to purchase digital gift cards directly from retailers.
• Use credit cards instead of gift cards to pay for purchases: To play it safe, you may want to limit your own gift card usage. You won't earn rewards by using gift cards. Instead, paying for purchases using rewards credit cards is a smarter move. The best credit cards offer protection against unauthorized charges, so you won't be held liable for fraudulent purchases. Plus, you can earn valuable rewards with the right card in your wallet.

Three tips to avoid falling victim to gift card theft

If you buy gift cards, make sure you take steps to protect yourself. These tips can help you spot potential theft and minimize the chances of falling victim to gift card scams:

1. Check for signs of fraud: Before activating a gift card, carefully look at the packaging to ensure that someone hasn't tampered with it. If something looks off, trust your gut.
2. Use your gift cards sooner rather than later: It's easy to forget about gift cards we've purchased or received as gifts. It's a good idea to use up the funds as soon as you can, so there is less chance for scammers to spend the cards before you do.
3. Register your gift cards: Some (but not all) gift cards can be registered, and in some cases, it may help protect you if the card is lost or stolen. If you can register a gift card, do it quickly. Check the back of the card to see if a registration link is available.

Be on alert for possible financial scams

You work hard for your money, and life is expensive enough as it is. Be cautious and do what you can to avoid scams so you can protect your money. As scammers get more creative, consumers are more at risk for potential theft. For additional tips, check out these personal finance resources.