SM man shocked after $700 drained from his Walmart gift card

Experts say fraudsters love gift cards because they are anonymous and easily accessible in stores

Kevin Wilson was thrilled when, as part of a Black Friday promotional deal, he got two Walmart gift cards totaling $700.

But when he went to a Walmart near his home in Surrey, B.C., this month to use his card, Wilson was disappointed to find that it had been drained - leaving a balance of only 27 cents.

According to transaction records, one card's cash was spent at a Walmart in Richmond, B.C., and the other, at a Walmart in Mississauga, Ont. - far across the country.

"I was shocked. The cards didn't leave my hand," said Wilson. He added that the cards showed no signs of being tampered with.

"That's like utter disbelief. How is this possible?"

Toronto-based cybersecurity analyst Ritesh Kotak says gift cards are attractive to fraudsters because they are not registered in anyone's name, and are easy to access in stores.

"Unfortunately, people are being conned," he said. "These con artists are becoming more and more cunning and sophisticated."

The Canadian Anti-Fraud Center said that between January. through September, it had received more than 1,000 complaints from victims of prepaid and gift card fraud, totaling up to $3 million in losses.

Box says the figure will likely increase over the holidays, as the cards are a popular gift item.

"People will be victimized, but they won't know it until after the holiday season when they try to use those gift cards."

'Light bulb went out'

After he was conned, Wilson decided to investigate on his own.

He said when he received his gift card, he was so excited that he briefly posted a picture of it on Facebook. The barcode is visible in the photo, but Wilson doesn't think that's a problem, as the security code on each card is hidden.

But after doing some investigation, Wilson realized that his photo might have allowed fraudsters access to his card. That's because shoppers can make purchases at self-checkout with a Walmart gift card simply by scanning their barcode — or a photo of the barcode.

"The bulb went out," said Wilson. "There was this Eureka moment and I was like, 'No way, it's not that easy.'"

As an experiment, CBC News loaded $5 on a Walmart gift card and attempted to purchase a $3 bag of walnuts at self-checkout by scanning a photo of the card's barcode. The transaction was successful, and the receipt shows the remaining card balance.

Walmart gift cards are worthless until customers load them with cash. Once loaded, the company prompts shoppers to enter the card's hidden security code when using it to make online purchases, but not during self-checkout.

Wilson said a fraudster could simply take a photo of a bunch of card barcodes at Walmart, and then try to buy items with them at self-checkout later on — in the hope that the card has been loaded with cash.

"It's kind of, like, terrible," he said. "All the cards at Walmart are on display in bulk. The barcodes are clearly visible."

Walmart Canada spokeswoman Stephanie Fusco told CBC News that the retailer is investigating Wilson's case and will reimburse her for the missing $700 if it is determined she was a victim of fraud.

Fusco said Walmart has implemented steps to help protect customers from gift card fraud, including signs in stores warning them not to share the information on their cards.

Another gift card scam

Nichelle Laus of Mississauga, Ont., almost fell for a different gift card scam. The former Ontario police officer posted his story on social media as a warning to others.

"It drives me crazy to see people being victimized like this, especially during the holidays," said Laus.

Her story began in October when she tried to buy a $50 Winner gift card at a Shoppers Drug Mart. He said the cashier felt the back of the card and told Laus that the fraudster had pasted another gift card's barcode sticker over the Winner's card's barcode.

Laus said the cashier then scanned the new barcode, which showed it belonged to an Esso gift card.

He said the cashier explained that if Laus put $50 on a Winners card, it would end up on the fraudster's Esso card.

"The cashier told me it was a big deal," Laus said. "Had he not noticed - and I wouldn't have noticed, I would have literally paid the 50 bucks, walked away with my card, and it was absolutely not worth it."

Earlier this month, Laus encountered a similar scam when selecting a $100 Playstation gift card at another Shopper. This time, it turned out that the barcode placed over the real one belonged to a card for LCBO, an Ontario liquor store.

Loblaw, which owns Shoppers, told CBC News gift card scams are widespread and that its employees are trained to recognize the fraud, including bar code tampering.

Cybersecurity analyst Kotak said that for a few hundred dollars, scammers can easily acquire the necessary software, printer and labels to replicate bar codes.

"If you're putting these labels on hundreds of gift cards across the country, you'll be able to recover your investment very quickly," he said.

To protect people from gift card fraud, both Kotak and Laus recommend retailers keep the cards behind the counter, so fraudsters can't tamper with them.

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