Gift Card Draining: 6 Checks Before You Buy, and MD's Law

Gift card draining is a scam where a thief copies the number and PIN from a card that is still hanging on the store rack, waits for you to buy and load it, then spends the balance online. You never meet the scammer, you never give out any personal details, and the person you give the card to finds it empty. The good news: most tampering leaves marks you can spot in about ten seconds, paying the right way gives you a route to your money back, and Maryland now has a law aimed squarely at this trick.

A gift card is only as safe as the rack it hung on. Check the back before you pay, and keep the receipt.

What is gift card draining, and how do scammers do it?

The FTC describes the basic version: a scammer peels off the protective sticker or scratches the back of a card on a display to read the number and PIN, then waits. Once someone buys the card and money goes onto it, the scammer can drain it without ever holding the card again (FTC, December 2024).

The DC Attorney General's office, in a December 2025 alert, listed three methods it was seeing:

1. Scratched and re-covered codes. The thief exposes the code, copies it and covers it up again so the card looks new.
2. Barcode swaps. A sticker with the barcode of a card the scammer controls goes over the real one. When the cashier scans it, your money loads onto the scammer's card instead of yours.
3. Scanned codes. Codes are read off cards still on the rack, and the thief simply waits for an activation.

That second method is the one most people miss, because nothing is scratched at all. The DC alert says it plainly: a card that looks untouched may still be unsafe.

How common is it?

Common enough that a quarter of people have run into it. In a 2022 AARP survey of 2,179 adults, 23% said they had given or received a gift card that had no money on it. Of those who tried to get a refund or credit for the missing balance, 54% could not (AARP, 2022). That survey counts every empty card, not only drained ones, but it shows how often the money simply vanishes, and how hard it can be to get back.

The scale behind the scam is large, too. A law firm review of Maryland's law notes that federal investigators in a Homeland Security effort called Project Red Hook arrested about 100 people in draining cases, and that one person working a store can tamper with thousands of cards in a short time (Reed Smith, October 2024).

Are gift cards safe to buy? Six checks at the rack

Yes, if you look before you pay. This checklist pulls together what the FTC and the DC Attorney General advise:

1. Turn it over. Look at the PIN area for scratches, scuffs or a sticker that looks lifted, wrinkled or re-applied.
2. Look at the barcode. A barcode should be printed on the card or package. A barcode on a separate sticker, or one sitting slightly raised or crooked, is a warning sign of a swap.
3. Check the packaging. Torn, re-glued or bent packaging is a reason to put it back. The DC alert lists damaged packaging first.
4. If one card is bad, skip the whole rack. The FTC says scammers often tamper with cards in batches. Tell a cashier or manager, and consider buying at a different store.
5. Choose stores that guard their cards. DC's alert suggests stores that lock racks, keep cards at the register, or add the barcode only at checkout.
6. Pay with a credit card if you can. The FTC calls it the payment with the most protection: if something goes wrong you can dispute the charge, and your card company will look into it.

Two habits help after the purchase. Register the card with the brand if it offers that, and check the balance on the brand's own website or in the store before you wrap it, as the DC alert recommends. If the money is already gone, you will know while you still have the receipt in hand.

What did Maryland's gift card law change?

Maryland passed what CBS News called the first state law aimed at gift card draining: the Gift Card Scams Prevention Act of 2024, signed by Governor Wes Moore (CBS News, July 2024). According to the Reed Smith review, it works in four ways:

There are exceptions. A chip card with no printed number, activated by registering it online, can skip the packaging rule, and so can a store's own card kept where only staff can reach it.

What this means for you: in Maryland, a card hanging on an open rack with its PIN behind a simple scratch strip and no warning label should not be there unless it fits one of those exceptions. If you see one, mention it to the store. The Maryland law covers sales in Maryland, so when you shop in DC or Virginia, lean on the six checks above.

My gift card was drained. What now?

Move fast. The FTC says the sooner you report, the better your chances, and some card companies do refund or freeze cards caught in scams (FTC gift card scams page).

1. Keep the card and the receipt. The card number and receipt are what the card company will ask for.
2. Call the company on the card. The FTC lists numbers for several big brands on its gift card page; for any other card, use the contact details printed on the card.
3. If you paid by credit card, call your card company and ask about disputing the charge.
4. Tell the store that sold it, so it can check the rest of the rack.
5. Report it to the FTC at ReportFraud.ftc.gov.
6. In DC, the Attorney General's office asks residents to contact its Consumer Protection Office at 202-442-9828 or the Department of Insurance, Securities and Banking at 202-727-8000, and to file a police report.

If someone called or texted and told you to pay them with a gift card, that is a different scam, and it is covered in our guide to why no real business asks for gift cards. Text messages that pose as big brands are another seasonal trick; see how real recall notices reach you.

The bottom line

Gift card draining works because a card can be robbed before anyone owns it. Ten seconds of looking at the back, the barcode and the packaging catches most tampering. Paying by credit card and checking the balance before you wrap it covers most of the rest. Maryland's law has made open, unprotected racks rarer there, but a clean-looking card can still be a swapped one, so keep that receipt until the card is spent.

If you would rather give something you can see and hold, browse what is on the shelves now at /shop or today's auctions, and find answers about how pickup and payment work on our FAQ.

Know someone buying gift cards for the whole family this year? Send them this before they head to the checkout.