Gift card fraud is rising, and Target is a favorite of scammers

The holiday season has led to increased gift card fraud, and scammers see Target’s online success as a gold mine

Target sign on the front of a store

According to online fraud prevention firm Bolster, there has been a dramatic rise in the number of gift card scams affecting shoppers. One of the most popular brands involved is retail chain Target

The research team at Bolster noted a recent gift card fraud website that impersonates Target's gift card balance checking page. The layout, text, and colors are identical to the authentic Target gift card balance checking site, so unsuspecting users can easily be tricked to enter their gift card numbers. 

Once the victim enters the gift card numbers on the fake site, it displays a never-ending “checking balance” status or some sort of error that makes users think the site is malfunctioning. “In reality, the valid gift card numbers are harvested by the criminals and monetized by either reselling them on other sites or using them to make purchases,” said researchers.

Researchers added that Target experienced a dramatic increase in e-commerce sales during the pandemic. In August, the company announced its digital sales tripled with online purchases and curbside pickup jumping by over 700%.

According to Bolster's research, Target isn’t the only organization experiencing gift card fraud. There was an initial spike in gift card fraud earlier in the year, but coronavirus-induced shelter-in-place orders created a brief lull in activity. The lull was short-lived. 

A new gift card fraud spike began in September and continued into November, corresponding with the early start of the holiday shopping season, including mid-October’s Amazon Prime Day.

Researchers said November saw the highest rate of new gift card scams with 6,881 total new scam sites, over 229 new sites per day, and nearly 10 times more new gift card scam sites created than in January.

Retail and gaming are gift card scammers’ favorite targets heading into the holiday season. In November, these categories accounted for 59% of all gift card scams online. 

Paul Bischoff, a privacy advocate at Comparitech.com, told ITPro that gift cards are attractive targets for cyber criminals for a few reasons. 

First, gift cards can act as a difficult-to-trace currency because they usually aren’t tied to anyone.

“Second, the potential revenue stream for fraudsters is twofold. Scammers can trick users into handing over card numbers and other info, which they in turn use to make purchases or sell on the dark web. On top of that, phishing sites can trick cardholders into reloading a card with more money. That money, along with the victim's payment information, goes to the scammer,” he said.

Chris Hauk, consumer privacy champion at Pixel Privacy, told IT Pro that users must remember that Target, Taco Bell, and any other merchant or restaurant that offers gift cards won’t volunteer to help you check your gift card balance. 

“They'd rather that you forget about the balances on your gift cards because in five years they can expire the card balance and keep the money. After one year passes, merchants can begin deducting from the card balance in the form of "non-use fees." This is free money for the retailer,” Hauk said.

“To avoid gift card scams, only use the retailer's official website to check a gift card balance (most retailers offer this on their website or look for a URL on the back of the gift card).”

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