gift card scams

According to the FTC, gift card scams have one thing in common: someone asks you to pay them or send them money using a gift card.

In this guide, we are going to show you examples of gift card scams to help you have a better idea of what they look like. We’ll also show you how gift card scams work, how to avoid them, and what to do if you are a victim.

A Research and Markets consumer data projection showed that the US gift card market was set to expand by 10% to $170 billion by the end of 2021.

This is great news for scammers, who love gift cards because they are almost untraceable.

You do not have to become one of their victims.

In this guide:

What is a gift card scam?

A gift card scam is a form of fraud that occurs when an unsuspecting victim is persuaded by a fraudster to send money or pay a debt, bill, or fee using gift cards.

The good news is that the total losses in a gift card scam are limited to the value of the gift cards involved.

However, this is still a painful loss when you realize that your gift card has been drained.

Luckily, there are things you can do to keep yourself safe from gift card scammers. We shall explore these things later in this guide.

How gift card scams work

Gift cards are popular with scammers because they are easily available and less secure than other payment options.

This is because gift cards are meant to be used as gifts, not as a payment method.

Gift cards are like prepaid cards with a specific amount of cash in them. Once used, they become useless. According to the FTC, this is what scammers are counting on.

So how do gift card scams work?

Well, the scammer will contact you via phone or email and ask you to send them a gift card or make a payment using gift cards.

You will then have to give them the gift card number and the PIN to complete the transaction. Once you do this, they withdraw all the money and disappear.

3 steps to a gift card scam

Step 1: The hook

This is where the scammer grabs your attention.

The call or email says they need some money urgently. If you do not comply, something bad will happen to you.

The scammer will pretend to be someone else to convince you. This could be anyone from the government to your parents or kids. They have to act fast so you won’t have time to confirm their identity.

Step 2: The ask

This is where the scammer gets specific.

They tell you you have to make the payment in gift cards, and they specify which gift card to buy.

Common gift cards that are targeted include eBay, Google Play, iTunes, and Steam. However, other gift cards can be targeted as well.

The scammers might also ask you to make a purchase at a specific store. Common stores include Walmart, Target, CVS, and Walgreens. However, they can also use other stores as well.

When scamming you out of large amounts of cash, the scammers might also ask you to buy gift cards from several stores. This is so that the cashiers won’t get suspicious.

Also Read: Does CVS sell Steam gift cards?

Step 3: The prestige

This is where the scammer disappears with your money.

The scammer will ask you for the gift card number and PIN. As soon as you give them these details, they’ll withdraw all the money on the gift card and disappear.

Red flags to look out for in a gift card scam

  • The caller asks you to make a payment using gift cards. Genuine businesses will never ask you to pay them in gift cards. This is the biggest red flags and you should immediately end communication with the scammer at the first mention of gift cards.
  • The caller specifies what gift cards to use or what stores to buy them from
  • They stay on the line with you as you go to the store and buy your gift card
  • The caller asks you to buy the gift cards from several different stores
  • An online seller asks you to make a payment using gift cards
  • The gift card looks tampered with or the packaging looks off

Examples of gift card scams

1. Government impersonator gift card scams

The scammer pretends to be from the IRS or the Social Security Administration. They’ll ask you to pay a fine or to pay taxes.

Similarly, a “State Trooper” may call you to let you know that you have missed jury duty. There is a warrant out for your arrest. Luckily, you can pay your bail using MoneyPak to clear your case.

How to tell it’s a scam: The government will never ask you to pay for its services using gift cards. If you do not pay, nothing will happen.

2. Utility company impersonator gift card scams

The caller says they are from your power company, your phone provider, your water company, or any other utility company.

They say they will cut off your services if you do not pay immediately.

How to tell it’s a scam: If you do not pay, nothing will happen. Plus, you cannot pay for any utility service using gift cards.

3. Tech support gift card scam

The scammer pretends to be from the tech support team of a product or service that you use. Common companies used include Apple, Microsoft, and Google because everyone uses their services.

They might try to convince you that something is wrong with your phone or computer.

How to tell it’s a scam: No legit business will ask you to pay for their services using gift cards.

4. Romance gift card scam

You meet the scammer on a dating site. They look and sound perfect. You hit it off but once they build your trust, they get into some trouble and need your help. They ask you to help them out.

Romance scammers usually make up believable stories to trick you into sending them gift cards. They do this for multiple partners until the money adds up to a significant sum.

Example of a romance gift card scam:

A widow in Pennsylvania was drained of $39,000 in a gift card scam by a man she fell for.

She lost the money after about 6 months of being in touch with the scammer.

The scammer made sure she considered him a friend before asking her to send him the money.

How to tell it’s a scam: Never send money to strangers especially if you have never met them. Also, if it’s an emergency, why do they need to make the payment in gift cards? If you feel like you’ve only recently gotten to know them and they are already asking for loans, they are probably out to scam you.

5. Fake check gift card scam

You get a check for a large amount in the mail. Apparently, it was sent to you by mistake. As a gesture of goodwill, you can deposit some of it and send them the balance on a gift card.

This scam works best if you were expecting a check. The scammer will ask you to deposit the amount you are owed and send them the balance in a gift card.

The check is fake. If you try to deposit it, you will be out all that money.

How to tell it’s a scam: Don’t be greedy. Call the check issuer to confirm first. And do not make any payments in gift cards.

6. Family or friend emergency gift card scam

A friend or family member reaches out to you and asks you to send them some money immediately. They say it’s an emergency. But you cannot tell anyone else.

How to tell it’s a scam: Hang up and call your friend or family member. Confirm that everything is alright with them.

7. Prize gift card scam

You have won a great prize. A lottery official calls to give you the great news. But you have to pay some money to redeem the prize.

Usually, you have to pay a fee, such as a shipping fee or some other legit-sounding charges. But you can only use a gift card to make the payment.

How to tell it’s a scam: Did you enter the competition in the first place? Plus, no legit business will ask you to pay using gift cards.

8. Auction/ resale site gift card scam

This scam is a tricky one to pull off, but a lot of people have fallen for it over the years.

A scammer will post an item for sale on an auction or resale site. The item is usually listed at a steep discount.

You reach out to express your interest in buying. They ask you to pay with a gift card.

They get the card number and PIN and disappear along with your money.

Sometimes, they’ll even ironically post a bunch of gift cards for sale. At a discount, of course. But you can only pay with gift cards.

You pay up, lose your money, and they still use the gift cards they sold you.

How to tell it’s a scam: If anyone asks you to pay them in gift cards, run.

9. Religious leaders scam

This is a recent reinvention of the first two impersonator scams on this list.

Scammers pretend to be religious leaders. They are raising money for a worthy cause.

As part of the scam, they reach out to worshippers by email, text, or phone. They ask the worshippers to buy gift cards.

How to tell it’s a scam: Has your religious leader ever contacted you asking for gift cards? Hang up and contact them, or better yet, visit them in person to confirm their request.

10. Gift card theft scam

This scam involves draining the cash on the card without it ever leaving the owner’s possession.

Scammers go to stores to the gift card section. They then scratch off the film strip on the back of the card to reveal the PIN.

Once that is done, they cover the area back up with a sticker, making sure everything looks good as new.

Armed with the gift card number and the pin, they enter these details into a computer program. The program alerts them when the card is bought or loaded with cash.

They will then quickly spend the cash on the card or cash it in before you get a chance to use it.

How to tell it’s a scam: If the card looks suspicious and different from other similar cards on the rack, don’t buy it.

11. 3-Way Call Balance Check Scam

This scam is common on bidding sites. It targets gift card sellers.

You list a gift card for sale. Someone makes an offer and everything seems to be going well.

The buyer wants to confirm the balance on the card before completing the purchase. Fair enough, you think. So you call the merchant in a three-way call.

While listening in on you entering the gift card number to confirm the balance, the fake buyer records the touch tones of the keys you press.

Armed with all the details they need, they then use the gift card to make a purchase before you can sell it.

Example of a 3-way call balance check scam:

A man in Ohio lost $400 while trying to sell a Best Buy gift card.

He allowed the buyer to listen in on the call as he confirmed the balance.

The gift card was used moments later to make a purchase in California.

How to tell it’s a scam: If someone is asking to listen in on your call as you confirm the balance, or they want to look over your shoulder as you do it, you are being scammed.

12. The Checkout Switch Scam

This scam is carried out by the cashier at the store.

You buy a gift card but a different card is activated at checkout instead. They keep the activated card. Or they activate your card as you watch, then switch it out with a different inactive card.

In the end, the cashier has a pile of active cards worth thousands of dollars.

How to tell it’s a scam: The cashier tries to distract you during the card activation process. Or the gift card number doesn’t match the number on your activation receipt.

13. Fake gift card activation scam

Sometimes, you may receive a gift card that needs to be activated. This process is usually done online.

The activation website and telephone number are listed at the back of the card. Sometimes, these details may also be on a sticker on the front of the card.

Before using the card, you have to go to the activation website. Here you’ll have to enter the gift card number, expiry date, and card verification code.

These are all the details that someone needs to use the gift card.

Scammers build websites to “harvest” or collect this information.

They do this by creating fake websites that look similar to the actual activation websites. They’ll then bid on the activation site’s keywords so you’ll always find them at the top of the page when you do a Google search.

When you enter your info on the fake website, the scammers take your info and activate your gift card themselves before draining your gift card.

How to tell it’s a scam: The site will have a design that looks a little sketchy. You may notice misspellings or weird grammar. Also, the website URL will not match what is on your card. Always manually type in the activation site’s website address to avoid this scam. Or better yet, call the number on the card to activate it instead of doing it online.

How to avoid gift card scams

  • Don’t buy gift cards from random sites. Only buy from reputable sources.
  • Whenever possible, only buy e-gift cards online from the issuing company’s website. For example, buy Amazon gift cards from Amazon.com.
  • If you have to buy physical cards, order them online from the store issuing them.
  • If you have to buy physical gift cards in stores, stick to stores that you trust.
  • Don’t buy the top gift card on the rack. According to the Better Business Bureau, this is where scammers often put their altered cards.
  • Do not buy gift cards from online auction sites like eBay or Craigslist. A lot of times, these gift cards are fake or stolen.
  • Hang up on fake callers. Ignore fake emails. Whenever someone asks you to make a payment in gift cards, do not give them the time of day.
  • When buying a physical gift card, look at it carefully before buying it. Does it look new and unused? Do the protective stickers at the back look tampered with? Is the PIN showing? If you are even a little suspicious, get a different card.
  • Keep your gift card and receipt. You should also note down the card’s ID number. This information will help you in case the card was not properly activated. It will also come in handy if you lose the gift card or if someone steals it.
  • Make sure the gift card matches the details on the receipt.
  • Check the receipt to make sure that the card has been activated. Some cashiers pocket the loaded gift card and give you an inactivated card that’s useless. When you immediately stuff the receipt in your pocket without really looking at it, it is easy to be defrauded.
  • If you can, register the card with the retailer issuing it immediately

What to do if you are a victim of gift card scams

If you become a victim of a gift card scam, the first thing you have to do is tell the gift card issuing company.

You can find the contact information for the gift card company on the card, usually somewhere on the back of the card.

Alternatively, a quick Google search should reveal how to reach the issuer of the gift card.

Remember to keep your gift card and receipt.

Pro tip: If you lost money in a gift card scam, remember to also report it to your local law enforcement. Having a police report may help make uncooperative card issuers take you more seriously.

Here are the contact details for companies that scammers commonly target:

  • Amazon: Report Amazon gift card scams by calling 1 (888) 280-4331. Be sure to keep your Amazon gift card and receipt, too. Read more about Amazon gift card scams.
  • eBay: Report eBay gift card scams to eBay customer support and have them call you back by leaving your number. Be sure to keep your eBay gift card and receipt, too. Read more about scams using eBay gift cards.
  • Google Play: Report Google Play gift card scams to Google support. Be sure to keep your Google Play gift card and receipt, too. Read more about Google Play gift card scams.
  • iTunes: Report iTunes gift card scams by calling 1 (800) 275-2273. Be sure to keep your iTunes gift card and receipt, too. Read more about iTunes gift card scams.
  • Steam: Report Steam gift card scams to Steam support. Be sure to keep your Steam gift card and receipt, too. Read more about Steam gift card scams.
  • MoneyPak: Report MoneyPak gift card scams to MoneyPak. Be sure to keep your MoneyPak gift card and receipt, too. Read more about MoneyPak gift card scams.

If you cannot find the contact information for the issuer of your gift card, report the issue to the FTC.

Also Read: Does CVS sell eBay gift cards?

Final Thoughts

If you get a gift card as a gift, try to find out if you can get the receipt too, just in case. This way, if anything happens to the gift card, or if you fall for a scam, you might still be able to get the money back.

Keep in mind that anyone who asks you for money via gift cards is a crook. Do not trust them.

It’s not all bleak, though.

The retail industry has been working with law enforcement to make gift cards more secure for buyers. Although a lot more still has to be done, there are now increased security measures and even measures against things like gift-card cloning.

Plus, the Credit CARD Act of 2009 provided extra protections for gift cards. Gift cards can now be used up to 5 years after they have been bought or reloaded. Gift card issuers can only charge dormancy fees after the first year.

Many companies are also implementing gift cards that never expire, which means you can use them at any time after you buy them.

Do you know any other gift card scams that are missing from this list? Let us know in the comments.

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