A new type of credit card fraud is costing Gig Harbor merchants significant losses, police say.
It’s called “credit card shaving,” and Gig Harbor Police Detective Tray Federici says there have been around a dozen cases in the city over the past six months.
Credit card shaving is a low-tech scam in which suspects shave off the 16-digit numbers of stolen gift or credit cards, and use embossing machines to stamp new, stolen ones.
Teaching Toys Too co-owner Melissa Tennille said her store has lost $7,000 worth of merchandise through shaved credit cards over the past few months.
The scam works because the crooks purposely damage the magnetic strip or chip on the card, so it won’t be accepted by the store’s reader.
They then ask the clerk to input the numbers manually. That bypasses the usual security check, and gives the scam artist time to take the goods and leave.
“Inevitably they will get the charge-back or notice the card was declined, but it’s now several days later and the suspect has made off with the merchandise,” Federici said.
Federici said the scam begins with a stolen credit card. The number on the card is then traded or sold to multiple people. Using an embossing machine, the criminals put the stolen credit card number over a credit card blank or gift card.
“They’ll take real credit cards, shave the existing numbers off or press the number back into the card and then they’ll re-press with the stolen credit card number,” Federici said.
An embossing machine can also be used to change the name and expiration date. A state law makes it illegal to use an embossing machine in conjunction with a crime.
Embossing machines can be bought on Amazon for around $170. Two machines have been confiscated by Gig Harbor police over the last two months.
Federici said shaved cards typically look suspicious to begin with, which should raise an immediate red flag for merchants.
“The credentials on the card are stickers, or if it’s printed on the card the Visa logo will look fuzzy,” Federici said. “The back of the card, it’ll look obvious altered. The chip will look like someone took a razor blade to it or shaved it.”
Federici asks merchants to no longer input credit card numbers in their machines, refuse the transaction, and call the police if they suspect an intention of credit card shaving.
“A person trying to perform a legitimate transaction will not contest the fact that you want to safeguard their cards and security,” he said.
At Teaching Toys Too, Tennille warns her employees to refuse to input faulty cards into the machines, but she said some scammers are extremely aggressive. If her employee feels that their personal safety is at risk, then Tennille accepts the lost merchandise.
“Nothing is more important than the people in my store. You can’t put a price on that,” Tennille said.
Tennille said this problem is the worst she’s seen in her 10 years at Teaching Toys Too. She said even if a well-known 11-year-old has his gift card declined, her employees should not input the card’s number.
“That 11-year-old won’t be able to buy that thing because he does not have a good card,” Tennille said. “And that’s sad.”
Even when a stolen credit card number stops working, the criminal can still work the scam, Federici said.
The scammer will take the first 12 digits and begin a guess-and-check method on a random series of four digits. They try their guesses on random, low-priced online items to see if the number works.
“They’ll get denial after denial after denial, but eventually they’ll get a number that works,” Federici said. “We’ve found notebooks that have many different combinations of the last four digits.”
Once it works, the suspect will press the new number into a credit card blank using an embossing machine.
Federici asks merchants and store owners to be aware of credit card shaving and to call the police immediately when they suspect a suspect is attempting this scam.
Tennille says this is a good time to support local business, now more than ever, in order to keep them afloat during a challenging time.