Buying Gift Cards? Here’s How to Avoid the Scam Behind the $14M Texas Case

 

Gift cards are everywhere. Grocery stores. Pharmacies. Big box retailers. Even gas stations.

That convenience is why they get treated like a quick grab item, and that is exactly where the risk starts.

But beware. Texas officials recently arrested three men suspected of a gift card fraud scheme estimated at $14 million. Authorities said the suspects had more than 400 gift cards when they were arrested.

This guide gives you a simple routine to protect your money. It also helps you spot the kind of tampering investigators warned about, like excess glue or damaged packaging.

What the Texas $14M Gift Card Arrests Tell Us

Texas officials described a setup that depends on normal shopping habits.

They said “gift card cloning” involves stealing un-activated gift cards from retail kiosks, opening the packaging, copying the electronic number, re-sealing the packaging, and then returning the card to the store kiosk. When a shopper loads funds onto the card, the criminal checks the balance and drains it before the shopper can use it.

Officials also said the suspects told investigators they usually stole gift cards from 10 stores a day, seven days a week, and had done so since May 2025.

Texas officials pointed to Texas Penal Code 32.56, a new law intended to crack down on gift card tampering, which went into effect on September 1, 2025. Below are example scenarios that could lead to a gift card scam.

Gift Card Scam Examples

Below are three quick situations that show what this scam can look like.

Example 1: the checkout rush

You are grabbing groceries after work. Lines are long. You spot a gift card rack near the register. You load $100 fast, then you leave.

Later, the balance is gone. The card was compromised before you bought it.

Example 2: the “one card left” mistake

You want a specific brand card. There is only one left on the rack. The packaging looks a little wrinkled.

That is the card to skip. Scarcity is not a reason to take the risk.

Example 3: the gift you save “for later”

You buy three gift cards during holiday shopping. You keep them in a drawer until the party two weeks later.

One card has a zero balance when the recipient tries to use it. That moment is stressful for you and for them.

A quick balance check before gifting it ensures the card balance is secure.

How Gift Card Tampering Works

This type of fraud does not require hacking your bank. It can start with a card sitting on a rack.

The basic flow

1. Someone gets access to cards hanging in a store.
2. Packaging is opened or disturbed.
3. The card’s electronic number is captured. Sometimes, the PIN gets exposed too.
4. Packaging is sealed again. The card goes back on display.
5. When a shopper loads money, the balance gets drained quickly.

Why this catches people off guard 

Most shoppers assume a brand-new card is safe. The card “looks” new, so it feels fine. That is the trap.

What to Check Before You Buy a Gift Card

A 30 to 45 second check can prevent a bad day.

1. Do a quick packaging scan

Look at the front first. Then flip it over. Then check the edges.

Texas officials urged shoppers to examine packaging closely and watch for excess glue or damage that could show tampering.

Packaging red flags
Packaging is your first clue. A lot of tampered cards still look fine from a few feet away. That is why the check needs to be up close and detailed.

• Glue that looks messy or thicker than normal
• Corners that look bent or softened
• Tears along the cardboard edge
• Plastic that lifts too easily
• Wrinkles near the seal line

A back panel that does not sit flatIf you see one red flag, put it back. Grab a different card.

2. Check the PIN area

Some cards have a scratch-off area. That area should look clean and untouched.

PIN area red flags

• Scratch layer looks thin or patchy
• Numbers are faintly visible
• A sticker covers the PIN area and looks uneven
• The surface looks scuffed like it was rubbed

Choose a different card if anything looks odd.

3. Choose the safest display spot

Location matters because access matters.

Better options

• Customer service counter
• Behind the register
• Behind a clear case
• A rack that sits close to employees

Higher-risk options

• Racks near exits
• Racks deep in aisles
• Racks that look picked over

What to Do at Checkout

Checkout is where the money hits the card. That is also where you can set yourself up for easier recovery if something goes wrong.

Confirm the amount clearly

Say it out loud to the cashier. Then look at the screen. Pay with a credit card and avoid paying with debit or cash whenever possible.

Examples:

• Load 25 dollars
• Load 50 dollars
• Load 100 dollars

Short. Clear. No confusion.

Save proof every time

Receipts feel boring until something goes wrong. If the balance disappears, proof of purchase is one of the first things you will be asked for.

Keep the receipt until the card is fully used.

Also take a photo with your phone. Receipts fade and get lost.

What proof gives you

1. Date and time of activation
2. Store location
3. Amount loaded

Avoid “set it and forget it” 

Loading a card then storing it for weeks adds risk. Use it soon when you can.

What to Do Right After You Buy a Gift Card

This step is the one people skip. It also reduces a lot of risk.

1. Check the balance right away

Use the website or phone number printed on the card or packaging.

If the balance shows the amount you loaded, that is a good sign.

If it does not, stop and act.

2. Use the card sooner, not later

Faster use limits the time a thief has to drain the funds after activation.

A simple timeline that helps.

• Best: same day if buying gift cards for a deal or a discount.
• Good: within a few days to a week
• Risky: weeks later, hard to avoid when giving gift cards as a gift to others.

Gift Card Safety When You Are Giving a Gift

Gift cards are still a solid gift. You just need a safer hand-off.

Include purchase proof

Many people avoid receipts because it feels less “gift-like.” Fraud changes that.

Easy options

• Put the receipt in the envelope behind your note
• Send a receipt photo through text
• Tell the recipient the store name and date

Tell the recipient what to do first

A simple message helps.

Example
“I checked the balance earlier today, but please check it again before using it orhopefully you can use it soon. Unfortunately, gift card tampering has been prevelant and I want to ensure you can enjoy it. ”

Digital Gift Cards Have Different Risks

Digital cards avoid the store rack issue, but scammers shift to fake or phishing emails and fake delivery links. The goal is to make you click fast. Here are some tips to eliminate the risk of getting scammed.

Buy digital cards from trusted sources

Stick to the brand’s official site or a major retailer you already know well. Be careful with “discount” card sellers you have never used before.

Treat unexpected messages as suspicious

Scammers send emails and texts that look official.

Common bait:

• “Your gift card is waiting”
• “Confirm delivery”
• “Your account must be verified”
• “Click to view your code”

A safer move is typing the brand’s website into your browser yourself. Skip the link.

What to Do If the Gift Card Balance Is Missing

Move fast. Keep your steps organized. Time matters because some issuers have short windows for disputes.

Step 1: Contact the card issuer

Use the phone number printed on the card or packaging. Use the official site shown there too.

Explain what happened in one sentence.
“I loaded this card on this date, and the balance is missing.”

Step 2: Contact the store

Ask for customer service or a manager. Tell them you need help confirming activation details.

Stores may track patterns, even if they cannot promise a refund.

Step 3: Save everything

Keep the card, packaging, receipt, and screenshots of the balance page.

Missing balance checklist
Have these ready before you call:

• Receipt photo with date, time, and amount
• Card number
• Card packaging, if you still have it
• A screenshot of the balance page
• Any error message shown
• The store location where you loaded funds

Extra Tips for Businesses That Buy Gift Cards in Bulk

Gift cards are common for employee rewards and customer incentives. That also makes them a business risk.

1. Store cards like cash

Keep them locked. Limit access.

2. Track cards with a basic log

A spreadsheet is enough.

Track:
1. Brand
2. Last 4 digits
3. Amount loaded
4. Date loaded
5. Staff handler
6. Recipient name or department

3. Load funds close to distribution

Loading cards weeks early gives fraud more time to hit.

4. Train staff on what tampering looks like 

Texas officials told consumers to look for excess glue or damaged packaging.

Teach your team that same quick scan.

Quick Answers People Ask All the Time

• “Are gift cards behind the counter safer?”

Usually, yes. Less access before purchase reduces risk.

• “Should I avoid gift cards on open racks?”

Not always, but you should inspect them more carefully and buy from racks close to staff.

• “Does keeping the receipt help?”

Yes. It is often the first thing issuers ask for.

• “Can a card be drained even if I never scratched the PIN?”

Yes. Texas officials described criminals copying the electronic number and then draining funds after activation.

• "Do laws address gift card fraud?”

Yes. Several states, including Texas, Kentucky, Louisiana, Utah, and Florida, have criminal statutes covering gift card tampering and fraud. At the federal level, the FTC enforces consumer protection laws and collects nationwide reports on gift card scams, which can support investigations and, in some cases, consumer refunds.

Final Thoughts

Gift cards can still be a good choice. They just need a smarter routine now.

Texas officials described a method where cards were taken from store kiosks, packaging was opened and re-sealed, then the funds were drained after shoppers loaded money.

You do not need to panic. You only need consistency.

Check packaging. Keep proof. Check the balance. Use the card sooner. That routine protects your money the next time you reach for a gift card on a store rack.