Gift Card Fraud Costing Millions

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They may be the most popular gift these days, and as such, they are also becoming a major target of scammers. So how do you protect your gift card purchase for you and your loved ones?

Imagine this scenario: your credit card is stolen, so you go to cancel it.

"The problem is before that happens, the person that steals the cards runs in to the Wal-Mart or Academy or one of the retail stores and buys gift cards with the stolen credit cards," continues Dan Jones with the College Station Police Department. "So they're getting gift cards before the credit card is cancelled."

It's the latest scam in the category of "gift card fraud." The National Retail Federation predicts nearly $25 billion worth of gift cards sales this holiday season alone, up $6 billion from last year.

With these crimes, the culprits are often tough to track, so it takes preventative measures to curb the crimes.

"It does not take long for some of the organized groups committing these kid of offenses to break the million dollar mark," Jones said, adding that the seven-digit thievery is happening in big cities like Houston, but could just as easily happen here.

Another major scam comes when a thief grabs a gift card in a store and writes down the numeric codes associated with that specific card. Many times, that code is hidden by packaging or a scratch-off covering.

"Then, with that info, once that card is activated, with certain gift cards, they can use them online to make purchases," Jones said.

So when you're buying a gift card, authorities say to check the packaging on the card. If it looks damaged or tampered with, choose another one.

Also, be weary of gift card stands that are easily accessible to shoppers. Try to buy cards that are behind the counter.

And once you have that card, make sure the recipient of your gift knows how much is on the card, and checks the balance regularly.

"If you get a gift card and you check the balance, and the balance is $28.52 or some odd number like that, it probably means the card's been used by somebody else," Jones said.

And that could mean someone's holiday season might be a little less merry thanks to the latest scam.

Some gift cards also have an expiration date. Be aware of that possibility and don't get thrown if your card ends up with a zero balance after a while.