Costco Shop Card Hack: Over $200 Stolen from Hundreds of Customers

Dozens of Costco digital gift card customers are reporting that their cards have been drained of all funds. The retailer has not provided details, and some customers are still trying to get a refund. Five affected customers from B.C. and Ontario reported discovering money missing from their cards in June or July. Some customers have received refunds, while others are still waiting or have been denied. Consumer advocate Daniel Tsai says Costco should have publicly disclosed the issue.

Dozens of Costco digital gift card customers have reported that their cards have been drained of all funds, with the retailer offering little to no information on the matter. The issue has affected customers in B.C. and Ontario, with reports of missing funds ranging from $150 to $1,000. Some customers have received refunds, while others are still awaiting resolution or have been denied refunds [1].

Costco has not provided details about the cause of the issue, but a letter sent to some affected customers suggests that unauthorized individuals may have accessed the cards. The retailer temporarily suspended online sales of digital Shop cards in early July and resumed sales later that month [1].

Consumer advocate Daniel Tsai has criticized Costco for not publicly disclosing the issue, stating that the retailer has a duty to inform customers about any compromise of their gift cards. Tsai argues that the lack of transparency could lead to a loss of customer trust in the brand [1].

The gift card industry is booming, but so is related fraud and organized crime. In 2021, Canadians reported $3.8 million in losses due to gift card fraud [1]. Cybersecurity and tech analyst Ritesh Kotak suggests that scammers may have accessed customers' email accounts or figured out the sequencing of the numbers on Shop cards' barcodes to recreate them [1].

Costco requires its customers to buy an annual membership but allows non-members to buy goods in-store using a Shop card. Kotak argues that if it turns out the Shop card problem wasn't the fault of customers, the retailer should compensate all legitimate victims [1].

In a separate development, Fold Holdings, Inc. has partnered with Blackhawk Network to distribute Bitcoin Gift Cards across over 400,000 retail locations in the U.S. The move embeds Bitcoin into familiar consumer channels like gift cards and loyalty programs, transforming crypto from an investment into a spending option [2].

References:
[1] https://www.cbc.ca/news/business/costco-gift-cards-1.7601882
[2] https://crypto.news/fold-expands-bitcoins-reach-through-americas-300b-gift-card-infrastructure/