One of my relatives was excited to receive a gift card from a popular retailer in the mail. Upon receiving it, they went to the store to use it, only to find the card didn’t have a balance on it: Someone had stolen the gift card code and applied new taping to the card.
Unfortunately, this is becoming more of a common problem. AARP estimates that up to 30% of people received gift cards with no funds on it. To combat this growing problem, Maryland passed an AARP-backed bill that protects customers from gift card fraud. Delaware, New York and Rhode Island have all passed similar bills.
The legislation requires retailers to use secure packaging and train their employees on ways to identify gift card fraud. The law went into effect for open-loop gift cards (think Visa cards) on June 1, and closed loop cards (retailers) on October 1.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Target unveils new gift card design
Target is one of the first retailers to offer a fresh design that protects customers. How it works is now when you pick up a gift card in the store, it contains a blank space where the gift card code used to be.
You take it to the register, where a Target employee applies the code sticker to the back of the card. It’s one way to ensure you receive a card with the funds loaded on it.
Meanwhile, I found the gift card process to be same as before when buying through Target's website. You can select the gift cards and denominations you want, and in some cases, you can choose e-certificates (sent via email) or you can mail them a gift card. In each instance of me doing this, I haven't encountered any gift card problems from my recipients.
Is there any recourse for gift card fraud?
If you have received a gift card with no funds on it, you’ll want to contact your issuer. To demonstrate, if you bought a gift card from Target before the new designs went into effect, bring proof of purchase with you and file a complaint either through its website or customer service desk.
Each retailer handles these differently. That’s why you’ll want to contact the store upfront to know what their policies are regarding these situations and what kind of information they require from you so you won’t have to make multiple trips.
Gift card safety tips
Gift cards can make thoughtful and convenient presents, but they can also be vulnerable to scams if you're not careful. For ideas on the most popular and secure options, check out our guide to the best gift cards available.
Whether you're purchasing a physical gift card or an e-gift certificate, staying vigilant can help protect your purchase. Here are a few essential tips to keep in mind when buying gift cards or e-gift cards:
- Buy an e-gift certificate: You can buy these online and send them to recipients via email or text. These emails come with instructions on how the person can redeem it.
- Look for signs of tampering: For physical gift cards, look for signs of labels being peeled or scratched.
- Buy online and send to physical location: Many retailers allow you to buy physical gift cards to send via the mail. While that might reduce the risk of gift card fraud, you’ll want to be careful as people steal mail packages too.
Bottom line
Gift card fraud is on the rise, but states are passing legislation to combat it. Retailers like Target have already adopted a safer way to buy physical gift cards and other stores will follow.
If you receive a gift card without funds on it, speak with the person who gifted you the card and request proof of purchase. That way, when you contact customer service, you have the proof necessary to have the matter resolved.
Related content
-
The Most Tax-Friendly State for Retirement in 2025: Here It IsRetirement Tax How do you retire ‘tax-free’? This state doesn’t tax retirement income, has a low median property tax bill, and even offers savings on gas. Are you ready for a move?
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D PremiumsIn 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
Plan for Higher Health Care Costs in 2026: Projected Medicare Part B and Part D Premiums
In 2026, Medicare participants will pay more for their health care. Part B costs are expected to rise more than 10%. Here's what you can do.
-
The Weak Dollar is Making a European Vacation Harder to Afford in RetirementTravel pros explain how you can afford a European vacation in retirement, despite a weak dollar.
-
Japan Tariffs: 5 Things That Might Get More Expensive for YouPresident Donald Trump's trade agreement with Japan features a 15% reciprocal tariff for all imported products, which could impact the prices of these items when you go shopping.
-
My First $1 Million: Retired Accounting Firm Partner, 62, Greater Boston AreaEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting ByLearning good financial habits — building an emergency fund, paying down debt, saving consistently — gives you flexibility, options and a path to security.
-
Ford Warns $3 Billion Tariff Bill Will Cut Profits and Pressure Prices in 2025Ford now expects a $3 billion tariff hit this year — pushing up costs on parts, altering vehicle pricing and narrowing dealer discounts even as sales stay strong.
-
Price Hikes on Ikea, Cars and Medication: What the EU Trade Deal Means for Your WalletTrump's trade deal with the EU averted the worst case scenario, but US consumers might still see price hikes on some key goods.
-
119 JCPenney Stores Just Sold — Here’s What Shoppers Should KnowThe $947 million JCPenney deal hints at bigger retail and real estate shifts.
