How Organized Crime Steals Millions From Shoppers

Miami Beach, Florida, Publix grocery store supermarket, gift cards display, Stop beware of scams warning sign. (Photo by: Jeffrey Greenberg/Universal Images Group via Getty Images)

Jeffrey Greenberg/Universal Images Group via Getty Images

Gift card draining has become a major problem with organized crime groups, primarily Chinese gangs, operating wide-scale gift card draining. Gift card draining occurs when scammers tamper with gift cards in a store so that when an unwitting customer buys a gift card, the value of the gift card becomes under the control of the scammer.

The most common way gift card draining occurs involves scammers going to racks of gift cards in stores and using handheld scanners that are easy to obtain, read the code on the strip of the card and the number on the front. They then put the card back in the display and periodically check with the retailer by calling its 800 number to find out whether the card has been activated and what the balance is on the card. Once they have this information, they either create a counterfeit card using the information they have stolen or order items online without having the actual card in hand.

Another common way gift card draining occurs is when scammers place a sticker with the barcode of a gift card that the scammers possess over the actual barcode of the gift card in the rack. Thus, when the card is taken by the gift card purchaser to the checkout counter to have the card activated, the funds used to purchase the gift card are credited to the card of the scammer. It is not until the gift card purchaser tries to use his or her card that it is discovered that there are no funds credited to the card.

In 2025, three Chinese nationals were convicted for their roles as part of a major international Chinese gift card crime ring. According to Homeland Security Special Agent Michael J. Krol, “These individuals were part of a Chinese transnational criminal organization that used a complex scheme to steal and launder millions of dollars through gift card theft.” During their trial it was disclosed that this particular gang compromised more than $100 million in gift cards that were used to purchase high value electronics, primarily Apple products which then were sent to warehouses for shipment to China, Hong Kong or countries in Southeast Asia. The criminal cells in the United States operated primarily in states with no sales taxes such as New Hampshire to maximize their profits.

An investigation by NHPR reported thirteen different facilities used to store goods purchased through compromised gift cards in New Hampshire including Windham, Seabrook, Londonderry, Jaffrey, Hampstead and Amherst used by Chinese gangs operating in New Hampshire.

NHPR reported Apple confirmed that during one 10 week period it shipped 46,364 items valued at $47 million to a single warehouse in Windham, New Hampshire while another warehouse in Amherst, New Hampshire received $35 million worth of iPhones during that time.

With so many expensive Apple products being sent to New Hampshire, criminals aware of the crime ring have been exploiting the situation including robberies of both FedEx drivers, and a UPS facility. In May of 2025 a Chinese national was murdered while unloading boxes from the trunk of his car at one of the Chinese gang’s warehouses.

Nationwide, the crime is of epic proportions. According to Adam Parks a special agent for Homeland Security, 1,000 people around the country are involved in the scam. “We’re talking hundreds of millions of dollars, potentially billions of dollars, [and] that’s a substantial risk to our economy and to people’s confidence in their retail environment.” The Department of Homeland Security is investigating these Chinese gangs nationally through Operation Red Hook.

A Florida Chinese gang member was convicted for his role in the gift card ring after being found with 6,000 altered cards while in California two Chinese nationals were arrested after being observed recording or altering gift card activation information, resealing the gift cards and returning them to the display racks at CVS stores. When arrested following a traffic stop, 10,000 gift cards were retrieved from their car. A search of their home found an additional 15,000 gift cards.