The gift card scam taking unsuspecting customers for an expensive ride

Aussie gift-givers spend billions on gift cards every year - but they could unknowingly be delivering their dollars straight into thieves' pockets.

A scam called "card draining" is wiping funds from prepaid gift cards before their rightful owners have any idea.

Vanilla Visa Gift cards sit on shelves at Coles, 7-11 and Target.

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Cybersecurity expert Bastien Treptel says crooks scratch the cards before repackaging them.

"They're going into these stores, collecting them, or using a bot attack, to essentially drain the funds," he said.

"A lot of the times they'll put the cards back in the store - they need to - and as soon as the victim goes and buys the card, funds are gone."

Grandmother-of-six Vicki Powell thought a Vanilla Visa gift card was the perfect present, until she ended up $250 out of pocket.

"As soon as we got the card out, [we] noticed that the four digits were missing, the last four digits," Vicki said.

"[It] came up as an invalid card - when he tried to swipe, 'cos there is a magnetic stripe."

Vicki's daughter rang the Customer Service number on the back of the card.

"He told her she needs proof of purchase and to go back where she bought it from," Vicki explained.

"(She) said can you tell me if it's been validated? And he said no, and hung up."

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Scott Graham got a $100 Vanilla Visa Gift Card from a mate and discovered the same thing - four digits scratched off.

"Coles will not take responsibility - they say take it to Vanilla, Vanilla won't deal with me- I don't even know where they are," Scott said.

It is understood InComm Payments - a major global player in the gift card market - took over Australian-based provider The Card Network, where they share offices in Richmond, Melbourne.

Coles says it is working with InComm payments to investigate and beef up the security of Vanilla Visa cards.

It says every affected customer will receive replacement cards or a full refund.

For more advice on avoiding and detecting scams, go to Bastien Treptel's Instagram page

FULL COLES STATEMENT

We are working closely with our supplier to investigate this issue and actively collaborate to ensure the Vanilla Visa cards we sell deliver enhanced security to further protect against attempted fraud.

Most importantly, every customer who has been impacted will receive replacement cards or a full refund.