Joan Oanes expressed surprise upon discovering that a gift card she had purchased had been completely emptied of its funds. The $50 Lululemon gift card, bought in October at a Shoppers Drug Mart in Brampton, Ontario, and gifted to her sister-in-law in December, appeared activated on the receipt but had no remaining balance.
Similarly, Martin Paquette from Oakville, Ontario, experienced a similar situation with a $50 Sephora gift card purchased at Walmart for his daughter’s Christmas gift. The card was found to have been drained of its value, with a transaction recorded on December 25, a day when most stores are closed, leaving Paquette and his daughter puzzled and disappointed.
The gift card market in Canada is witnessing rapid growth, projected to increase from approximately $11 billion in 2023 to nearly $14 billion by 2028, as per a 2024 report by Research and Markets. However, this expansion also presents an opportunity for theft, with experts warning consumers to be vigilant against potential scams.
Joe Aversa, an associate professor at Toronto Metropolitan University’s Ted Rogers School of Retail Management, emphasized the lucrative nature of gift card theft, attributing it to increasingly sophisticated tactics employed by criminals. Various methods, such as stealing and copying card information from publicly displayed cards, are used to drain card balances before legitimate purchases are made.
Experts advise consumers to purchase gift cards from secure locations, ideally where cards are not openly displayed, and to spend the balance promptly. Bruce Winder, a retail analyst, highlighted the lack of fraud protection for gift card use, placing the onus on customers to bear the risk of potential draining incidents.
Efforts to combat gift card fraud have intensified, with law enforcement agencies in the United States, under initiatives like Project Red Hook, targeting organized crime groups involved in such schemes. These criminal networks, often linked to Chinese syndicates, exploit stolen funds from gift cards to finance illegal activities, emphasizing the need for coordinated international efforts to address this issue.
In response to the growing threat of gift card fraud, retailers like Loblaw and Walmart Canada have implemented measures to detect tampering and protect customers. Despite challenges in recovering lost funds, affected individuals like Oanes and Paquette have seen some resolution through retailer assistance, underscoring the importance of vigilance and caution when purchasing and using gift cards.