As the popularity of gift cards continues to grow, thieves are finding new ways to empty the balance off a card before the rightful owner has an opportunity to spend it.

Barbara Davidson received a prepaid $200 Visa gift card for her birthday and planned a trip to the mall. Davidson attempted to spend the card at several stores and during each attempt the transaction was declined.

A confused Davidson called the phone number on the back of the card. A representative of Citizens Bank, the bank which issued the Visa, informed Davidson that the balance on the card had been previously spent.

“I said ‘No, that’s wrong’,” said Davidson. “We have to figure out what happened, we have to solve this problem because that’s not me.”

“How could someone else have my card?”

In an attempt to reclaim her funds, Davidson filled out and submitted a Citizens Bank dispute form. Months later, Davidson had yet to receive either a refund or an explanation from the bank. Her frustration increased when the bank attempted to close her dispute claim because a resolution had not been reached within 120 days.

Consumer Watch reporter Lea Williams-Doherty contacted Citizens Bank on Davidson’s behalf.

In a statement, Nita Powers of Citizens Bank of Canada addressed Davidson’s case.

“We cannot discuss specific details of how this occurred for security reasons, but we agree that the time frame it has taken to resolve this particular situation has been unacceptably long"

Citizens Bank has refunded Davidson’s $200 but the financial institution did not provide an explanation for the missing funds.

Calgary police are not aware of an issue with thieves stealing balances from prepaid gift cards.

Lea Williams-Doherty contacted SAS Institute, a software and security company in the United States.

Dan Nagel, a security specialist with SAS, says there are two ways thieves could have emptied the cards.

  • Stealing gift cards from a store and replacing them with lookalikes
  • Skimming the information from a card and returning it to the shelf

Nagel says both scenarios would require assistance from someone at the store, likely a cashier, who would inform the thieves that an unsuspecting customer had purchased a compromised card.

“What they'll do is they'll place someone in the retail store, generally with a cell phone, that will pin or text the ringleader of the scheme to let them know that the card is active,” explains Nagel.

To protect yourself from purchasing a compromised gift card, purchase a card with tamper-proof packaging and avoid any cards which appear suspicious.

If you are the recipient of a gift card, officials recommend you spend the balance sooner than later.

With files from CTV's Lea Williams-Doherty