Editor’s note: The above video was recorded in May 2025.
AUSTIN (KXAN) — Texas officials are warning the public about a fraud scheme that could impact gift cards sold across parts of Texas.
The Texas Financial Crimes Intelligence Center (FCIC) arrested three men, accusing them of stealing about $14 million from gift cards purchased at stores from Dallas-Fort Worth to Central Texas and across the Gulf Coast.
In a press release, investigators with FCIC said the three men were arrested for the scheme, which was believed to have started back in May 2025.
FCIC said the process they allegedly used to scam consumers is known as gift card cloning. It begins with a perpetrator stealing unactivated gift cards from retail store kiosks.
Criminals will carefully open the gift card packaging so they can copy the electronic number from the card. The card is then put back in its packaging and resealed. The scammer then returns the card to the store kiosk and waits for a customer to purchase and activate the card.
When the card is purchased and funds are loaded to the account, the fraudster can drain the funds before the customer can use the card, according to FCIC.
In its press release, FCIC said, “Consumers are encouraged to closely examine gift card packaging before purchasing gift cards, looking for any excess glue or damage to the packaging that could indicate someone has tampered with the card.”
A new law passed in the 89th Texas Legislature aimed to crack down on gift card tampering cases. Texas Penal Code 32.56 — Fraudulent Use, Possession, or Tampering with Gift Card, Gift Card Packaging, or Gift Card Data or Redemption Information — went into effect September 1, 2025.
According to FCIC’s Consumer Resources webpage, Texans who suspect they have been the victim of financial fraud should contact their local law enforcement authorities.