The Setting:

Black Friday, Small Business Saturday, Cyber Monday, and Giving Tuesday are all happening in the next week. Freshly recovered from their Thanksgiving food coma, people are logging on or heading out to take advantage of great deals on gifts for their kids, partners, friends, and family. Some people will stock up on gift cards to give away or to purchase presents.  

The Plot:

A Chinese organized crime ring deploys hundreds of runners across the U.S. to steal blank gift cards hanging from displays in major grocery and retail chains. They go back to a secret location, open up the cards, record the card numbers and PINs, and carefully repair the packaging. The runners return them to the store and place them back on the rack, where customers then unwittingly purchase and activate the tampered cards. Meanwhile, far away in a warehouse, workers continuously look up the card numbers online. When they find one with a balance, they immediately load it into an online wallet. The gang buys high-value items (like Apple, Nike, Ulta, and more) to bring back to China, where the items are hard to come by.  The gang sells the stolen goods, amassing millions of dollars. The money is almost impossible to trace and avoids trafficking drugs or weapons, which U.S. and international authorities aggressively police.

The Inspiration:

Sounds like a far-fetched espionage movie. But it’s real. The U.S. Department of Homeland Security has launched a task force dubbed Project Red Hook to combat the scheme, known as “card draining”. They estimate that over 1,000 people could be involved, leading to the theft of hundreds of millions of dollars. Card draining also happens on a smaller scale by local criminals. Unfortunately, card draining is just one of the many scams that target shoppers during the holiday season. According to the FTC, about 1 in 3 Americans have been the victim of an online shopping scam in the last year. A recent Norton report showed that 20% of shoppers reported being targeted by a scam during the holiday season, with over half of them falling victim to the scheme … and that’s only the people who recognized the malicious attempt.

Crafting Your Hero’s Journey:

It’s up to you to ensure that your holiday shopping adventure is a fun holiday romp, rather than a horror film. Prepare yourself to be a holiday shopping hero.

Protect the Innocent Gift Cards

You don’t have to be afraid of using gift cards, but you should take a few basic precautions to avoid gift card fraud.

• Treat gift cards like produce. Look carefully at the card and the packaging before buying it. Compare it to others on the rack or elsewhere in the store. Look for discoloration, warped cardboard or plastic, or signs that hot glue was used.
• Do not buy unused gift cards second hand. These offers are usually fraudulent.
• Order gift cards directly from the source. Buy them from the retailer online or get it from the cashier at the actual store. Gift cards kept in a locked case are also safer. 
• Load the card into your electronic wallet/account ASAP. Gift card funds can’t be in more than one account at a time. So put it into your account before the hacker can.
• Report an empty card. Call the customer service number on the back first. The service company may be able to freeze the funds, if it hasn’t been spent. Then go to the retailer where you bought the card. Many of them will refund the cost or issue a new gift card.
• Don’t send gift cards as payment for a service or fine. Real lawyers, tradespeople, government agencies, etc. don’t accept payment in gift cards.

Be Trained in the Way of Prices

When shopping online, have a general sense of how much things should cost, so you can spot a deal that is too good to be true. (Tools like  Camelcamelcamel, Keepa, or Honey track prices on Amazon or other sites.) Beware of bait & switch or outright fraud when you see rock bottom prices. Avoid the resale market. Grinch Bots, automated programs that quickly buy up hot items and then resell them for a huge markup, lead to vastly inflated prices. Online reselling/auction sites or unfamiliar pop-up shops open you up to an increased risk of fraud and counterfeit goods. Only buy items from vendors you can verify, in person or online.

Make Sure You Can Trust Your Team

Pop-up shops, sale ads, and charitable appeals are everywhere near the holidays. Unfortunately, not all of them are legit. Scammers go to great lengths to build intricate fake shopping sites and market them aggressively to unsuspecting shoppers. The Better Business Bureau provides tips for determining if you’re dealing with a reputable business. In addition, follow these tips:

• Avoid using QR codes, which obscure where you’re being sent. Unless the QR code has been provided by a trusted source, skip them!
• Look at the business’s reviews for reports of fraud or poor service. Be wary of businesses with no/few or only recent reviews.
• If a site only accepts direct payments (Zelle, Paypal, Venmo), that is a huge red flag. Credit cards are a safer way to make purchases.
• Legitimate businesses and charities have a phone number and address you can contact. If a site only has an online form or email address, give elsewhere.
• Only use a site with an https:// address (not http://) and a closed lock icon in the URL bar.
• Don’t use links within an online ad. Instead, look up the business or charity on Google and go to the site independently.

Keep One Eye Open 

Your first line of defense against identity theft and fraud is to pay close attention to your bank and credit card statements. Flag any suspicious purchases and contact the institution immediately. During the holiday season, go to your banking app at least once a week to quickly peruse recent activity.

Review and respond to fraud alerts from your bank or credit card as soon as possible to stop any potential fraud. But remember that these alerts can be scams too! Do not provide your account number, PIN, or CVV in response to any alert. Real banks and card companies don’t ask for this info. Instead, they ask you to verify suspicious purchases.

Don’t Overshare

While you need to share certain data to make a purchase online (delivery address and payment information), be wary of any retailer requesting more information than seems reasonable for a purchase. This applies to coupon code sites as well – if you have to reveal any personal data to get a discount or promo code, move on! In addition, when shopping online or accessing important accounts, make sure people can’t see your credit card or keyboard.

Enjoy Your Holiday Shopping Adventure!

This holiday weekend, may you be stuffed with good food, spend quality time with friends and family, and find the perfect gifts for everyone on your list … all while shopping the sales safely and securely!

-- By Karen Beaudway, Pitt IT Blogger