Gift cards are a popular and convenient gift, especially during the holiday season. In 2021 alone, Americans purchased over $172.5 billion worth of gift cards, according to Research and Markets. However, their popularity also makes them a prime target for fraudsters. The Federal Trade Commission (FTC) reported $113.5 million in losses due to gift card scams in just the first two quarters of 2022.
To protect yourself and your loved ones, it’s essential to recognize the most common gift card scams and learn how to avoid them.
1. Gift Cards as a Fake Payment Method
The Scam: Fraudsters Impersonate Authorities
Scammers pose as government officials, utility companies, or even family members in distress. They claim you owe an overdue bill, have won a lottery but must pay fees to claim it, or that a loved one is in urgent need of financial help.
Then, they instruct you to purchase gift cards and share the card numbers and PINs, allowing them to steal the funds. Commonly requested cards in these scams include Target, Google Play, Apple, eBay, and Walmart.
How to Stay Safe: Know the Rules
- No legitimate entity (IRS, police, utility companies) will ever demand payment via gift cards.
- If someone requests gift cards as payment, it’s a scam.
- Always verify the claim by calling the agency or company directly using their official phone number.
- If a family member claims to need urgent money, confirm their situation independently before acting.
2. Buying Gift Cards from Fake Websites
The Gift Card Scams: Counterfeit Online Sellers
When searching for gift cards online, you might find websites offering significant discounts. However, some of these are fraudulent, meaning:
- The card never arrives.
- The card has a lower balance than promised.
- The card has no money loaded at all.
How to Stay Safe: Buy from Trusted Sources
- Only purchase from well-known retailers such as Amazon, Target, Walmart, or Costco.
- Check the URL carefully before buying.
- Look at Ratingfacts or Better Business Bureau (BBB) reviews to verify the seller’s legitimacy.
3. Deeply Discounted Gift Cards on Third-Party Sites
The Gift Card Scams: Too-Good-to-Be-True Discounts
Scammers lure buyers with unrealistic discounts on platforms like eBay, auction sites, or gift card exchange apps. Many buyers never receive the card or find that it has a zero balance.
How to Stay Safe: Use Verified Exchange Platforms
- Choose platforms with buyer protection, such as CardCash or Raise.
- Check customer reviews and their refund policies.
- Avoid sellers that require direct payments instead of using a secure checkout system.
4. Tampered Gift Cards in Stores
The Gift Card Scams: Pre-Stolen Card Balances
Even in physical stores, scammers can tamper with gift cards by recording card numbers and PINs. Once the card is activated, they drain the balance before the real buyer can use it.
How to Stay Safe: Inspect Before Purchasing
- Check if the protective sticker covering the PIN is intact.
- Avoid cards that look damaged or tampered with.
- Keep the purchase receipt in case you need a refund.
What to Do If You Fall Victim to a Gift Card Scam
If you realize you’ve been scammed, take immediate action:
- Report the scam to the FTC (US) or Action Fraud (UK).
- Contact the gift card company and explain the situation—some may offer partial refunds.
- If you purchased the gift card with a credit or debit card, notify your bank to dispute the charge.
- Spread awareness to prevent others from falling victim to similar fraud.
Final Thoughts: Stay Vigilant and Protect Your Money
Gift card fraud is on the rise, but you can outsmart scammers by staying informed. By purchasing from trusted sources, inspecting physical cards, and recognizing suspicious payment requests, you can safeguard your money and ensure a secure shopping experience.
Stay cautious, spread awareness, and enjoy a scam-free holiday season!
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