Scammers Love Gift Cards, Too

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Even though the holiday season has come to a close, scammers are still open to receiving gift cards. The Federal Trade Commission (FTC) warns that fraudsters continue to favor using gift cards over other payment methods to steal money from their victims. Gift cards are difficult to trace, and victims are unlikely to get their money back once the card is used.

With an average loss of $840 per person, falling prey to a gift card scam can seriously harm your finances. But you can avoid becoming a victim to these scams by learning how to spot them.

What Is a Gift Card Scam?

A gift card scam plays out when a scammer convinces their victim to buy a gift card and provide them with the physical card or the numbers that appear on the back of the card. Victims believe the gift card (or cards) will be used to pay for a product or service, or to settle a debt such as back taxes or a past due utility payment. The scammer will insist this is the preferred (or only) way to pay — but the only ones who prefer this type of payment are thieves.

Common Gift Card Scams

Staying alert to consumer scams is the best way to keep your money safe from fraudsters. Here are several of the most common frauds that use gift cards for payment:

  • Business, Government, Family/Friend Imposters: The scammer poses as a well-known company, government agency, or someone you know to gain your trust. They will then pressure you to send a gift card payment to avoid fines or penalties. Scammers may also pretend to be calling on behalf of a family member or friend who needs financial help right away.
  • Tech Support: A fake pop-up warning about a malicious virus or another technical issue appears on your computer screen and directs you to call for assistance. These scams are often convincing since the scammer claims to work at a major technology company. But to get the virus removed and avoid losing personal data, they claim you must first make a gift card payment.
  • Lonely Hearts or Romance: Scammers will post a fake dating profile online to lure their victims into a relationship. After several weeks or months of private communication, the scammer will make an urgent request for money — in the form of a gift card. They may promise to pay it back, but they often disappear once they have the gift card or card numbers. Some may stick around, though, and try to scam the same victim multiple times.
  • Fake Check: The scammer asks the victim to deposit a check into their own bank account that is larger than the amount owed. The victim is directed to use the excess funds to purchase a gift card and send it to the scammer. However, the check is fake and never clears.

These frauds may begin with a phone call, unsolicited email, or text message directed to the victim.

How to Protect Yourself from Gift Card Scams

Remember that gift cards are for buying gifts, not for making payments. Avoid sending gift cards to anyone you do not know, and stop communicating with anyone who demands gift cards as payment for products or services. Make payments to legitimate companies using a credit card or personal check.

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