Don’t Get Scammed: The Hidden Dangers of Physical Apple Gift Cards
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Physical gift cards are sadly becoming much riskier buys as criminals figure out new ways to effectively steal their redemption codes, rendering them valueless before the legitimate recipient even opens them.
While gift card issuers and retailers have long tried to protect against gift card theft by only activating them at the point of purchase, it seems that scammers have come up with an interesting — and surprisingly low-tech — way to get around this.
A new report from Australia’s ABC News highlights how gift card tampering is becoming a much more common problem. The article shares a specific incident where a man at a Coles supermarket was caught on camera surreptitiously removing several Apple Gift Cards from his pockets and placing them back on the racks.
That may seem counterintuitive for a crook, but the missing piece of that puzzle was that he was only replacing them because he’d already tampered with them to retrieve the codes before repackaging them and returning them to the store.
As with nearly all gift cards, the codes are entirely useless until the cards are activated at the register. Hence the need to put them back so that some unsuspecting customer will purchase them. Once the cards are activated at the register, the crooks can then use the codes they’ve already retrieved to siphon the funds into their pockets, leaving the customer with an empty gift card.
It’s not necessarily a new scam, and it’s certainly not an isolated one. However, the news report indicates it’s becoming far more widespread — and it goes far deeper than just a few opportunistic thieves.
Homeland Security in the US has been investigating this issue for several years, with Project Red Hook linking it to money laundering in China, human trafficking and even murder.
ABC News Australia
The man described in the article was arrested and ultimately convicted after Coles worked with the police to monitor the man, busting him with a haul of tampered cards before he could return them to store shelves. After obtaining a warrant to search his home, they found a bag containing 47 “iTunes gift cards” (aka Apple Gift Cards) grouped in “bundles of five labelled with Post-It Notes.”
The cards ranged in value from $100 to $500. Following his arrest, police alleged he handled more than $10,000 worth of gift cards, and he reportedly told law enforcement officials that he had been hired by “an unnamed criminal syndicate.”
“All of America’s top 20 retailers were being affected,” lead investigator Adam Parks told ABC News Australia, pointing to “young Chinese nationals” working for organized crime syndicates as the common thread.
There’s no insight as to precisely how the crooks know when these cards are activated. However, the most likely explanation is that they use automated bots to continuously test the codes at regular intervals.
As ABC News notes, Apple changed its gift card packaging last year to make them harder to tamper with, but crooks are resourceful, so it’s only a matter of time before they find ways to defeat those security measures. Becoming the victim of a tampered gift card can also have other consequences, as we reported on in December, when a man was completely locked out of his Apple Account after attempting to redeem a $500 Apple Gift Card that had been purchased from a mainstream retailer.
The victim of this particular fraud, Paris Buttfield-Addison, found himself not only locked out of his entire Apple life, but without recourse as none of the standard methods of appeal were bearing any fruit. He was fortunate to be well-known enough within the Apple community — he organizes the /dev/world conference — that media coverage and an escalation to Apple Executive Relations solved the issue for him. However, everyday Apple users might not be so fortunate.
These cautionary tales ultimately mean you should be a lot more careful when purchasing physical gift cards. Digital gift cards are still by far the safest way to go, but if you want a physical piece of plastic to hand someone, you can order one directly from Apple online, which will be shipped straight to your door. However, if you’re in a hurry, we recommend confining your purchases to retailers like an Apple Store, where gift card racks are more closely watched. Also be sure to inspect a card and its packaging carefully before purchasing it to ensure it shows no signs of having been tampered with.
