Two sophisticated gift card scams drain thousands as experts warn of Christmas surge

Two new, sophisticated gift card scams are costing consumers thousands of pounds and are expected to increase as demand for vouchers rises ahead of Christmas, police and industry representatives warn.

In one scam, known as "voucher draining," fraudsters obtain voucher numbers and PINs from cards displayed at tills and use them to spend balances after the cards have been activated at checkout. In a separate scheme, sometimes called the "voucher courier" scam, perpetrators phone victims posing as officials or bank staff and coerce them into buying gift cards and supplying the voucher codes as a form of payment or "proof" of cooperation.

In voucher-draining incidents, criminals note down or photograph card numbers and PINs from cards that are out on shelves. Many gift cards have PINs concealed under a removable foil or sticker; fraudsters are reported to remove or peel back those protections to capture details, then replace the covering or reseal the card so the tampering is not immediately obvious. Once a card is purchased and activated at the till, the fraudster or an associate can use the recorded details to spend the balance before the intended recipient ever attempts to use the voucher.

York Outer MP Luke Charters described being a victim of this type of fraud after receiving an M&S gift card. "Within 20 minutes of the gift card being purchased in an M&S in Leeds, it had been spent in another branch in Manchester," he said. An initial small transaction was used by the offenders to test the card before the remaining funds were taken, he said. Charters said he has since heard from constituents whose relatives found gift cards drained before Christmas.

In voucher courier cases, fraudsters phone and say they represent organisations such as HM Revenue & Customs, the DVLA, the police or the victim's bank or employer. They invent urgent reasons why the victim must immediately purchase gift cards from retailers such as Apple, Amazon or Boots and provide the voucher codes. Some perpetrators claim to be undercover officers who need bait for an investigation, or promise that a courier will collect the cards to keep them "safe". The callers use social engineering to fluster and rush victims into compliance.

Detective Sergeant Ben Hurley of the City of London Police's Dedicated Card and Payment Crime Unit said gift card fraud is becoming more prevalent and is often used to launder money. "If a scammer gets a £100 gift card loaded with money that isn't his and sells it on for £50 he profits by £50," he said.

Dr Hannah Shimko of the Gift Card & Voucher Association (GCVA) said the sector works to reduce fraud through measures such as purchase limits, delayed activation and fraud monitoring, but stressed that public awareness remains crucial. "Gift cards are safe, flexible and hugely popular, but their convenience can sometimes be exploited by scammers," she said.

Retailers have taken some steps to warn customers. Boots has placed signs in stores stating "Gift cards are for gifts, not for payments. No genuine business or government agency will ever insist you pay them with a giftcard." An M&S spokesman said the company takes gift card security seriously, works closely with industry groups and has refunded Mr. Charters while apologising for his experience.

Consumers are being urged to take several precautions. If contacted and asked to buy gift cards to resolve a supposed problem, people should treat the request as fraudulent: genuine banks, government agencies and law enforcement will not demand payment by gift card. Victims or those who suspect tampering should contact their bank immediately, report the incident to Action Fraud, and notify the retailer and card issuer. Keeping receipts and proof of purchase can help when seeking a refund or replacement.

Legal protections can assist victims. The Consumer Rights Act 2015 requires that goods supplied be fit for purpose; industry advisers say that if a card has been activated and fraudulently used before delivery to the intended recipient, a retailer may be obliged to replace or refund it. Scott Dixon, founder of Complaints Resolver, advised consumers to cite "breach of contract" under that act when pursuing refunds and to provide evidence that the card was used fraudulently.

Retail staff training is also a focus. Charters urged stores to lock high-value gift cards or train staff to spot suspicious purchases, analogous to how banks monitor large cash withdrawals. He said stores should intervene if, for example, a customer who appears unlikely to need multiple high-value vouchers tries to buy them in bulk.

Police and industry bodies recommended immediate reporting of any suspected fraud and urged people to pause and seek advice before acting on urgent demands for gift cards. If a received gift card has no balance, the person who bought it should contact the retailer with proof of purchase; retailers will typically investigate and may reimburse where fraud can be shown.

As gift card purchases typically rise in the weeks before Christmas, the combination of increased turnover and sophisticated social-engineering tactics has prompted warnings that both voucher-draining and voucher-courier scams could become more widespread without greater public awareness and retailer safeguards.