A national retailer is rolling out redesigned gift cards to prevent fraud following the passage of an AARP-backed Maryland bill aimed at protecting consumers.

Target announced it is making changes to its gift cards to prevent criminals from tampering with them and draining their value before they are purchased by unsuspecting customers. Fraudsters would scratch the film strip on the back to obtain the security code needed to access the money on the card, then replace the strip, making the card appear unchanged.

Consumers who purchased the cards – and often gave them as gifts – were unaware the cards were compromised.

The newly designed CQ Target GiftCards have a blank space where codes once appeared; a Target employee will now add a sticker with a security code at checkout.

“Consumers love gift cards, giving them and receiving them. But our latest survey shows that nearly 30% of U.S. adults have given or received a worthless gift card in the past 12 months,” said Kathy Stokes , AARP’s director of enforcement. Prevention programs. “Target’s focus on more secure packaging is good news and an important step in protecting consumers. »

The move follows the passage of a new Maryland law aimed at reducing gift card fraud. The measure was supported by AARP and signed by Gov. Wes Moore earlier this year. The new law requires that gift cards sold in stores be packaged in secure packaging. Additionally, sellers must train their employees on how to detect gift card fraud – something Target also says it is starting to do. Merchants who sell gift cards online must register them with the state Attorney General’s Consumer Protection Division.

Avoid scams and fraud during the holidays

Maryland’s law takes effect June 1 for “open loop” gift cards, such as Visa and American Express, which can be used anywhere they accept them. For “closed-loop” gift cards, such as those offered by major retailers, the law takes effect October 1. Target has already begun making its gift cards more secure, using hundreds of cybersecurity experts to protect consumers from fraud, the company said in a statement. a declaration.

Other states have also tried to address this problem: A new Delaware state law took effect in September and requires retailers that sell third-party gift cards to post notices alerting consumers to potential scams. New York and Rhode Island have similar laws and other states are considering adopting them.

The FBI is warning shoppers to beware during the holiday season, when scammers use sophisticated tactics to steal from gift buyers. A recent AARP survey found that 82 percent of adults have encountered some sort of fraudulent activity.

Gift card theft is particularly frustrating for victims because it is difficult to track down the thieves. The Federal Trade Commission reported that 41,632 fraud incidents involving gift cards were reported in 2023. The total amount of losses reported was $217 million.

Want to know more about avoiding scams? Visit AARP’s FraudWatch Network and sign up for free Monitoring alerts.