Search: [retailer] gift card balance
Ad shows up:
Text: Check Your [Retailer] Gift Card
Display URL: https://www.[retailer].com/
Click the ad, get redirected to the malicious site: https://www.[retailer]-gift-card.com/
Ads always have redirection involved, typically through a third party, to track ROI, conversions, etc. How the attackers take advantage of this is their redirection redirects to the real site if it's the Googlebot or from an IP range known to be owned/used by Google (or other filtering based on location, language, etc). If it's not, it redirects to the malicious site.
One solution is that the first hop in the chain has to match the domain of the display URL. That at least somewhat shows you can have a redirection that you control on the display domain. Of course, there could be an open redirect on that display domain, but those are becoming increasingly rare.
Work for a large retailer and we dealt with this a lot a year or two ago. Built custom monitoring to detect it and we sent gobs of data back to Google showing it happening. Still pops up every once in a while, but they've made some improvements in their detection/prevention.