Gift cards are a convenient and thoughtful way to give presents to those hard-to-shop-for friends and relatives. Some people might think they’re impersonal, but that’s not necessarily true. The thoughtfulness is still there since you knew which of their favorite stores to give, but you’re still able to make sure the recipient gets exactly what he wants…and in the right size and color!

Unfortunately, the very thing that makes gift cards such a practical and thoughtful gift is what makes them an important part of the scammer’s toolbox. Gift cards are anonymous, untraceable, refillable, and accepted both in stores and online. They can be purchased nearly anywhere, and once paid for, they are just as vulnerable to theft as cash. For those reasons, scammers have relied on gift cards as forms of payment from their victims for quite some time, but a new gift card scam has cropped up just in time to ruin the holidays.

Most retail gift cards have a dull gray coating covering the PIN number on the back. This coating is scratched off by the recipient before using the card to make a purchase, but scammers have learned a terrible workaround. Using similar gray coating stickers that can be purchased online, they go into a store that sells lots of gift cards. They scratch the existing coating off the PIN number and take a picture of the barcode and PIN, then place a new sticker over the PIN.

From there, it becomes a waiting game. The card isn’t worth anything until it’s activated at the checkout, so the scammer just keeps checking the balance on the card by phone or online until he finds that someone has actually purchased it. Then he drains the money from the card, leaving your gift card empty. When you try to use it or you’ve given it to someone this holiday, it’s worthless and your money is gone.

In order to avoid this scam, check your blank gift cards carefully before you buy them for any signs of tampering. This would include scratches to the back surface of the card, a gray coating that doesn’t look like the coating on other cards nearby, a bent or torn cardboard sleeve glued to the card, and other similar signs of wear.

Questions about identity theft? Contact the ITRC toll-free at (888) 400-5530 or on-the-go with the new IDTheftHelp app for iOS and Android.