Plano police seize thousands of gift cards in scheme

Police in Plano seized some 4,100 gift cards this month in a far-reaching crime ring.

Removing the tampered-with gift cards for Apple, Amazon, Sephora and Foot Locker from area stores saved customers nearly $650,000 in potential scams, police said in a news release.

Two people have been arrested in the gift card-draining scam, and police said more arrests are forthcoming.

Card draining is when someone removes gift cards from a store display, opens them and records the card numbers and PINs. The scammers then repair the packaging and return the cards to a store display. When a customer selects and loads money onto the card, the scammer is able to access the card online and steal the balance.

Plano’s forgery unit worked with the U.S. Secret Service and U.S. Immigration and Customs Enforcement to surveil stores across North Texas, including H-E-B, Walmart, Tom Thumb-Albertsons, Walgreens and CVS.

“This scam is showing signs of reaching far outside of the State of Texas,” police said in the release.

Police spokeswoman Jennifer Chapman said officers observed two people placing such gift cards onto store shelves in multiple cities, including Plano. A 42-year-old woman and 33-year-old man were arrested for unlawful use of a criminal instrument.

In recent months, federal authorities have warned of a rise in scams related to gift cards, which have few protections for consumers and can yield a potential windfall for criminals. Last holiday season, Americans spent nearly $30 billion on gift cards.

ProPublica reported this month that federal authorities are investigating the involvement of Chinese organized crime rings in gift card fraud schemes that have swiped hundreds of millions of dollars, or more, from American consumers.

The U.S. Department of Homeland Security launched a task force to combat the scams in response to a flurry of consumer complaints and arrests connected to card draining, according to the nonprofit news organization.

It is not yet clear if the Plano arrests are connected to the organized crime rings.

Police offered tips for customers who purchase gift cards:

• Consumers should inspect gift cards prior to purchase and notify staff if anything appears out of the ordinary.
• Keep a receipt as proof of purchase.
• If you become a victim of card draining, contact the retailer and explain the missing funds.
• If it’s a prepaid card, look at the back and contact the funds provider — such as InComm Payments, Green Dot or Blackhawk — to report the stolen funds and attempt to recover a remaining balance.
• File a report with the law enforcement agency where the card was purchased, as well as with the Federal Trade Commission.

Police ask that anyone with additional information related to this investigation call the tip line 972-941-5555.