by: Susan Johnston, US News

Gift cards will be the most requested gift this holiday season for the eighth consecutive year, the National Retail Federation reports. Unfortunately, this also creates an opportunity for fraudsters who want a piece of an industry worth hundreds of billions of dollars per year.

Just ask James Bregenzer, 32, of Chicago, who purchased a $500 airline gift card as a Christmas gift a few years ago for his mother who was planning a trip to Disney (DIS) World. After he brought the gift card home from the grocery store where he purchased it, he noticed the PIN area on the back of the card was scratched off, so he called the airline. “[I asked] if there was any way they could exchange my gift card for a new one, use it to purchase a new one or otherwise protect my purchase with the potentially compromised PIN,” he says.

The airline said there was nothing it could do for him and suggested he use the gift card immediately while it still had its $500 value, but his mother didn’t know her travel dates yet, and he wanted to save the gift for Christmas. “Sure enough,” he says, “when she tried using the card just a week later, it had a zero balance.”

Watch Out When Buying or Redeeming

Gift card fraud can happen when a gift card is purchased or redeemed, according to Pete Kledaras, chief risk officer at CashStar, a gift card platform that works with hundreds of major retail brands. Thieves can purchase a physical or digital gift card using a stolen credit card or simply steal the gift card number and PIN and leave the physical gift card. In the latter case, thieves will typically use the balance themselves. “Once cards are stolen, there are any number of ways that thieves can turn that into money for themselves,” Kledaras says. “They can resell them on the secondary market, or they can go into the store and purchase physical goods that they can sell.”

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