Gift cards may be a convenient last-minute holiday gift, but a surge in fraud cases across Ontario is prompting warnings from police and consumer advocates for shoppers to stay alert.
Incidents of gift card tampering are increasing in the lead-up to Christmas, with authorities in several communities reporting arrests and large seizures of compromised cards. In Hamilton alone, police recently seized more than 250 gift cards valued at over $100,000 following a suspected theft earlier this month.
The Retail Council of Canada estimates gift card fraud cost retailers $5.7 million in 2024, a sharp rise from $3.8 million in 2021. The organization is urging stores and consumers to take extra precautions.
“Ensure gift card packaging is intact and that the PIN is not exposed,” the council advises. “If a card appears tampered with, it should not be sold.”
The Canadian Anti-Fraud Centre also lists gift card fraud among its top holiday scams, warning consumers to closely inspect cards before purchase and to avoid resale or auction sites when buying online. Legitimate businesses, the agency notes, will never ask for gift cards as payment, particularly under pressure.
Police report spike in cases
Hamilton police said they arrested a 51-year-old Toronto man on Dec. 10 after a report of someone manipulating gift cards on display at a local business. Investigators allege the suspect replaced bar codes on store cards with those linked to cards already in his possession. He was stopped later in traffic, and more than 250 gift cards were seized. The man faces charges of fraud, theft and possession of property obtained by crime.
In Kitchener, Waterloo Regional Police arrested a 39-year-old man from Markham on Dec. 12 after being alerted to similar activity at a retail store. Officers said hundreds of tampered gift cards — worth up to $133,000 if activated — were recovered. He was charged with theft and fraud.
Kingston Police have also issued warnings about an increase in gift card tampering. They say offenders typically remove cards from store racks, copy or replace bar codes or card details, then return the cards to shelves. When an unsuspecting customer later buys and activates the card, the balance is immediately transferred to a “master” card controlled by the suspect. Victims often only discover the fraud when the recipient tries to redeem the gift and finds a zero balance.
Why fraud rises at the holidays
Retail analyst Bruce Winder told CBC News that gift card fraud tends to spike during the holiday season, when consumer spending increases.
“You’ll probably see it over-index over the holidays, but it’s a year-round issue,” he said.
If your card is drained, refunds aren’t guaranteed
Winder previously told Metroland that getting a refund for a drained gift card can be difficult.
“It’s hard for consumers to prove someone has stolen your gift card balance, even if you keep the receipt,” he said, noting that retailers must rely largely on trust. “Thieves pretend to buy and return things all the time. That’s how they make their money.”
As a result, reimbursement is not guaranteed and depends on the retailer’s policies and the circumstances.
How to avoid gift card scams
Consumer advocates recommend several steps to reduce the risk of fraud:
- Buy gift cards from reputable sources, such as official retailer websites or staffed in-store customer service counters.
- Avoid unattended display racks, where tampering is easier.
- Do not purchase cards from third-party resale sites or online classifieds.
- Inspect packaging carefully before paying. Look for scratched or resealed PINs, unusual bar code stickers, or damaged packaging. If anything seems off, choose another card and alert store staff.
- Keep your purchase and activation receipts.
- Use the card promptly, as scammers monitor inactive cards and drain them soon after activation.
- Register the card online or set a PIN when possible, especially for prepaid Visa or Mastercard cards.
- Check balances only through the official phone number or website listed on the card. Avoid unfamiliar balance-check sites that may be phishing scams.
- Consider digital gift cards delivered by email or secure platforms, which are less vulnerable to physical tampering.
- Treat gift cards like cash — keep them secure and never share the card number or PIN.
- Never use gift cards to pay bills, fines or fees. No legitimate business or government agency will request payment that way.
With fraud cases climbing across the province, police and consumer groups say a few extra minutes of caution at checkout could save shoppers from turning a thoughtful holiday gift into a costly disappointment.