A massive scam involving stolen gift cards has cost everyday buyers hundreds of millions of dollars. Criminals managed to drain the funds from physical gift cards sold in retail stores across the USA before unsuspecting customers even had a chance to use them. This highly organized criminal operation resulted in nearly twenty arrests and the recovery of millions of dollars in stolen electronic devices.
Thieves drain store gift cards to buy and smuggle devices
The scam started in local retail outlets. Thieves would take gift cards off the shelves, carefully open the packaging, and write down the PINs. They would then place the seemingly untouched cards back on the store displays. As soon as a customer bought one of these cards and loaded it with money, the thieves received an alert and instantly drained the balance.
The criminals then used this stolen money to buy hardware from Apple. They focused their purchasing efforts in New Hampshire because the state does not charge sales tax. This allowed the group to maximize the amount of gear it could buy with the stolen funds. The purchased items, which included iPhones and MacBooks, were shipped to a local warehouse.
From there, the devices were repackaged and sold to gray market importers located in China, Dubai, and South America. The true scale of the operation is staggering. During one raid alone, authorities discovered four thousand iPhones sitting in a warehouse with an estimated value between eight and nine million dollars.
The entire scheme, run by Chinese nationals, is estimated to be worth hundreds of millions of dollars. The situation even escalated to extreme violence, with one person murdered during a warehouse robbery.
Police in New Hampshire teamed up with the Department of Homeland Security to break up the ring. The tech brand fully cooperated with the investigation as authorities worked to track the stolen goods. The company has not offered a public comment on the matter yet, but it did help the police gather evidence.
To avoid falling victim to similar schemes, the safest option is to skip the grocery store gift card racks entirely. You can purchase digital gift cards directly from the company online. If you must buy a physical card in a store, inspect the packaging closely for any signs of tampering or exposed PINs before you pay at the register.
