Gift Card Tampering Schemes Drained Over $100 Million in 2025, Prompting Retail Changes and Federal Investigation

Organized groups, primarily Chinese gangs, drained more than $100 million from gift cards in 2025 by tampering with cards on store racks before purchase. Scammers used handheld scanners to record card numbers and strip codes, then returned the cards to displays and monitored retailer 800 numbers to learn when balances were activated.

Once activated, the groups either created counterfeit cards or ordered merchandise online.

A second method involved placing stickers bearing the scammers’ own barcodes over the original codes on display cards. When a customer bought the altered card, the purchase funds were credited to the scammers’ account instead. The buyer discovered the loss only after attempting to use the card.

Three Chinese nationals were convicted in 2025 for their roles in one such ring. Homeland Security Special Agent Michael J. ” The group purchased high-value electronics, mainly Apple products, and shipped them from warehouses to China, Hong Kong, and Southeast Asia.

The cells operated mainly in states without sales tax, including New Hampshire. An NHPR investigation identified thirteen storage facilities in Windham, Seabrook, Londonderry, Jaffrey, Hampstead, and Amherst. Apple confirmed that during one ten-week period it shipped 46,364 items valued at $47 million to a single Windham warehouse and $35 million worth of iPhones to a facility in Amherst.

Criminals outside the original ring exploited the flow of goods. Robberies targeted FedEx drivers and a UPS facility. In May 2025 a Chinese national was murdered while unloading boxes at one of the warehouses.

“We’re talking hundreds of millions of dollars, potentially billions of dollars, [and] that’s a substantial risk to our economy and to people’s confidence in their retail environment,” Parks said. The Department of Homeland Security is investigating the networks through Operation Red Hook.

Separate cases illustrate the scale. A Florida member was convicted after authorities found 6,000 altered cards. In California, two nationals were arrested after being seen recording or altering activation data at CVS stores; officers recovered 10,000 gift cards from their car and 15,000 more from their home.

Retailers have introduced countermeasures. Some add PINs covered by scratch-off material. Target now prints codes only at checkout on cards that previously carried pre-printed numbers. Other chains use tamper-proof packaging or locked displays that prevent cards from being returned to racks once removed.

Forbes reported that buyers can reduce risk by purchasing cards kept behind customer-service counters and asking staff to scan pre-loaded cards to confirm full value before purchase.