Gift Card Scams Explained: How to Stay Safe This Holiday Season

Gift cards may seem like a safe and thoughtful gift, but they’ve also become one of the easiest ways for scammers to steal money. As digital transactions grow and shopping habits shift, fraudsters have developed increasingly clever methods to exploit gift card systems.

From fake family emergencies to tampered cards at retail stores, gift card scams are especially common around the holidays when shoppers are rushed or distracted. This guide breaks down the most frequent types, how they work, and how to avoid gift card scams.

Key Insights:

• According to a holiday shopping survey, gift cards are among the top three most popular purchase categories this year.
• Gift card scams are one of the more common forms of phishing or fraudulent online scams.
• States like Maryland are introducing gift card fraud laws, requiring better packaging, scam warnings, and employee training to protect consumers.

What Are Gift Card Scams and How Do They Work?

There are several types of gift card scams. Reports of various consumer issues with scams range from fake family emergencies to gift card draining before you’ve even purchased the card in the first place. There are two primary categories for gift card scams.

• Forced purchasing of gift cards: There are many scenarios where a scammer tries to force or coerce a victim into buying a gift card and sharing the details online or over the phone. Whether you received a call from a “government” or some online suitor, the Federal Trade Commission has issued a gift card scam warning that states “No real business or government agency will ever tell you to buy a gift card to pay them.” 
• Gift card draining: Gift card draining occurs when someone locates a gift card’s number and security code. The scammer then reseals the card so that customers won’t notice it’s been compromised. Later, when a customer buys the card and loads it with payment, the scammer has access to the funds and uses them before the customer can. The card is drained before it can be gifted or used. 

Common Gift Card Scams

Gift card scams typically include impersonation scams, card draining at retail stores, fake prize offers, and fraudulent sales on platforms like Facebook Marketplace.

Family emergency scam

Family emergency gift card fraud is a common form of senior scams. Scammers impersonate your loved ones and claim they're in urgent financial need, whether due to an accident, needing to pay bail, a medical emergency, or another reason. They then ask you to send money via a gift card. Some scammers go to great lengths to appear legitimate, including using AI voice cloning to sound like your loved one. It is also common for scammers to hack loved ones’ social media or email accounts to send messages asking for money.

These fake emergencies may seem real, especially when the caller sounds like your loved one or the message comes directly from their email address or social media account. However, before you send any money, take time to verify and look out for common scammer red flags.

First, call your loved one directly, not the number that contacted you, to verify there’s an emergency and that they need financial help. No matter how convincing the caller may be, never send money via a gift card, and do not share your gift card numbers and PINs.

Warning Signs:

• Pressure to send money right away via a gift card.
• The caller insists you don’t tell or contact other family members.
• The caller’s voice sounds familiar, but they refuse to do a video call with you.

Gift cards on Facebook Marketplace

Among the various social media shopping scams and Facebook scams, discount gift cards are an easy one to spot. In this scam, the fraudster offers to sell gift cards for less than their nominal value. For example, in this Facebook Marketplace post, the scammer offered $25 Xbox gift cards for $20 each. Customers buy the cards and then discover they have no value – they are stolen or already spent. 

Source: facebook.com

Warning Signs:

• Buying and selling gift cards through Facebook or another unmonitored marketplace.
• Paying less than the full value of a card from an unknown individual.

Physical gift card scams

Buying a gift card in a store? Be cautious. Some scammers gather gift card information including a number and pin and put them back on shelves. Unsuspecting shoppers buy the card and load it, but scammers spend the funds faster than you could even use it.

Another physical card scam involves fake barcodes. Scammers put fake information on gift cards, so that customers think they are buying and loading one card, while they actually are loading a card held by the scammer. For example, in one review, the customer shared that they bought a $500 Vanilla gift card at Walmart. When they called to activate the card, the representative said:

needed to be replaced cause some one tried to use it with out activating it… I waited a couple of weeks, maybe three , no new card. I called customer service and they told me that the card had a zero balance on it. I still have the card with the activation sticker on it. I never used it…

Warning signs:

• Barcodes are slightly raised as a sticker covers the original printed code.
• The packaging of a gift card appears to be tampered with, even minimally. 

Government scams

Scammers may pretend to be with the IRS or other government bodies. An official institution won’t ever ask you to use a gift card or call you unless you specifically request them. Beware and ask for their official names. It would be beneficial if you hung up and called the official number you know or can find on the website.

Warning signs:

• You’re asked to pay taxes or fines with a gift card.
• An immediate demand for payment is made.

Workplace scams

You may receive a message from your so-called colleagues, managers, or boss asking you to buy gift cards for them and send their photos. 

That's exactly what happened to one Reddit user who got tricked into buying gift cards for their colleagues by someone impersonating their boss.

Source: reddit.com

Another option is a call from tech support claiming that you have specific issues with the computer and they need access to it. Once they have access, they can steal your data or ask you to pay for their service with a gift card. No tech support or utility company will ask you to do so.

Warning signs:

• A threat to cut off your utilities if you don’t pay straight away.
• A request for remote access to your PC.

Gift card scams over the phone

Gift card scams over the phone take different forms. One of the most common ones is when scammers use fear tactics during unsolicited calls or pop-ups, claiming there's an emergency involving your bank accounts. Victims are told terrible news about their finances and are encouraged to buy gift cards to protect their funds. Naturally, then the scammer asks you for the card number and PIN and steals the funds.

Warning signs:

• You are asked to call about your bank accounts. If this happens, hang up and call the official number for your bank to avoid fake scam phone numbers. 
• You can’t solve financial problems at your bank by buying gift cards. 

Prize scams

You're told you've won a prize: a vacation, phone, or cash. But must first pay fees using gift cards to claim it.  This was the case for a Publishers Cleaning House reviewer who ultimately lost money.

Received info from an individual at pchsweepstakes.weebly.com stating that he was a PCH agent, and that I had won $1,000,000 in the membership program, but would have to pay $300 for a lifetime membership with an Apple gift card in order to collect. I did, before recognizing the .weebly.com at the end…

Warning signs:

• If you haven’t used this company before, it’s probably a fake prize. 
• No company will ask you to pay fees with a gift card. 

Tips To Avoid Gift Card Scams

Take the following precautions to avoid falling victim to gift card scams:

• Only purchase from trusted sellers, preferably directly from the retailer or gift card issuer.
• Avoid buying from unfamiliar websites, especially if the cards are being sold at discounted prices. Those might be counterfeits or stolen gift cards.
• Inspect physical gift cards before buying them. Ensure that the packaging and stickers are intact. Avoid cards with scratches, damaged packaging, or exposed PINs or barcodes.
• Keep your order confirmations or purchase receipts for your gift card purchases in case you need to produce them in the future as proof.
• When you receive the card as a present, don’t hesitate to register it and change the PIN. If you are still afraid of being scammed, use the funds as soon as possible. 
• Never send photos of your gift card PINS or redemption codes to strangers or unsolicited callers.
• Check your gift card balance through the issuer’s official website after every purchase to verify that the expected amount is available.

Never use a gift card to pay or send someone money. Gift cards are meant for purchases at designated stores, not for paying taxes, utility bills, bail, or emergency expenses.

What to Do if You Already Paid a Scammer with a Gift Card

If you have already paid a scammer, it is important that you act quickly by taking the following steps:

• Contact the gift card issuer immediately through the company’s official customer support channels. Explain that you have been scammed, and if requested, provide your purchase details and gift card number. Ask that the card be frozen to prevent further charges. Even if the balance has been spent, ask the representative to investigate the transaction.
• Contact your bank or payment provider to report fraud and to find out whether the transaction qualifies for a dispute or chargeback. 
• Secure any affected accounts. Review activity on the affected accounts and change credentials and passwords for your emails, social media, and shopping accounts. Enable multifactor authentication, where possible.
• Report the scam to the appropriate authorities, including filing a complaint with the FTC and the FBI Internet Crime Complaint Center.
• Report the incident on reputable online review websites, such as PissedConsumer.com, to warn others about the scam.

Keep in mind that there is no guarantee you will get your money back. It depends on how soon you report the gift card fraud to the issuer and payment provider, their policies, and the funds remaining on the card. To improve your chances of a gift card scam refund, contact the issuer as soon as possible, organize and present any evidence that may help your case, and follow up on the investigation frequently.

How to Contact Gift Card Companies

Report any fraud to the company to minimize loss. Keep your receipt and your card as proof.