Gift card fraud is becoming an increasingly sophisticated form of organized retail theft, with criminals using methods that can leave both retailers and customers with significant losses.
During a recent Washington Senate Law & Justice Committee work session in Auburn, representatives from the Washington Retail Association and the state Attorney General’s Office discussed how gift card theft is evolving. Criminals may remove gift cards from store packaging, copy barcodes, or tamper with PIN covers before returning cards to store displays. Counterfeit barcodes can also redirect funds to accounts controlled by thieves. Another emerging method, known as “ghost tapping,” uses contactless payment technology to purchase gift cards in bulk without taking cards from store shelves.
Once stolen card information is obtained, criminals can monitor balances online and quickly drain funds after cards are loaded. In one recent Washington case, two Snohomish County sisters were indicted in connection with schemes that allegedly generated more than $80,000 in gift cards.
Prosecuting these cases can be challenging. Investigators may need records from gift card issuers to establish when cards were loaded or used, and those records are not always readily available. Authorities also face difficulties identifying individuals who move stolen card information or money online.
The Washington Retail Association is developing legislation that would make tampering with gift cards chargeable regardless of whether a card has been activated. The association also supports expanding the Organized Retail Crime Association statewide and restoring $500,000 in funding that was vetoed during the previous legislative session.
The broader scale of retail theft underscores the issue. Statewide retail theft totaled an estimated $2.7 billion in 2024, according to the article.
