Hahn Calls on Retailers to Protect Consumers from Gift Card Draining Scam

Updated: Hahn sends letter to CVS CEO

San Pedro, CA – This morning, Los Angeles County Supervisor Janice Hahn held a press conference calling on retailers to better protect consumers from a growing gift card scam problem amid holiday shopping. Just last week, Supervisor Hahn bought a Vanilla gift card at a CVS for her nephew’s birthday that was drained before he could use it.

“I am fortunate,” said Supervisor Hahn. “What I lost on this gift card I was easily able to repay in cash to my nephew. But I am worried about the people who are barely scraping by who can’t afford to be ripped off.”

The scam, known as “gift card draining,” works two ways. In the first instance, scammers attach a barcode from a card they already have to an unsold gift card in a store. When someone buys the tampered card and loads money onto it, they are loading money onto the scammer’s card. In the second instance, a scammer would steal the details off a legitimate gift card and then place it back on a store rack. That scammer can then track when the card is bought and loaded and then quickly drain the money.

“I am calling on retailers like CVS, Target, Walgreens and others, to take immediate steps to protect their own shoppers from these scams,” said Supervisor Janice Hahn. “It should not be up to consumers to defend themselves from scams when you have the power to prevent them all together.”

She is calling on retailers to place gift cards behind glass or behind a service desk while scams continue, better train check out clerks to recognize fake barcodes placed on cards, or add warning signage on gift card displays.

Today, Supervisor Hahn sent a letter to CVS Health CEO Karen S. Lynch about the issue. Read letter here or the text below:

December 21, 2023
Karen S. Lynch, President & CEO
CVS Health
1 CVS Drive
Woonsocket, Rhode Island 02895

Dear President Lynch,

Last week, I visited one of your stores here in Los Angeles County and picked up a Vanilla Visa gift card for my nephew’s birthday. I took it up to the register and asked to load it with $100. But when my nephew went to use the gift card, all the money had already been spent.

I got ripped off, but I found out I was just one of many victims of a growing gift card scam.

I am fortunate that I was able to repay my nephew in cash. But I am worried about your customers who are barely scraping by who can’t afford to be ripped off.

The scam is called gift card draining, and the manager I spoke to in your store said he was well aware of it. Yet the store hadn’t taken steps to prevent it.

In many of your stores you put everyday essentials behind glass or behind a counter, like deodorant or toothpaste. When those items are stolen, it hurts your bottom line. But when gift cards are used to scam shoppers, it hurts our bottom line. Yet you offer no protection for us.

CVS, and other retailers, have a responsibility to your customers to protect them from these scams, and if you wanted to, you could take action tomorrow. I am asking you to place gift cards behind glass or behind a customer service desk while scams continue. If not that, you must better train your checkout clerks to recognize fake barcodes placed on cards and add warning signage on gift card displays.

You have the power to help save Christmas for thousands upon thousands of your customers nationwide. Please, do the right thing.

Sincerely,
JANICE HAHN
Los Angeles County Supervisor