Gift cards are an easy way for retailers and shoppers to access products and pass on presents to friends and family. According to Research and Markets, the global gift card market is worth $405.17 billion. However, fraud in this area has become a real problem for companies and consumers.
In 2022, 48,800 gift card scams were reported, resulting in a $228 million total loss that affects people across age and demographic groups.
Key Insights:
- Gift card scams are popular with fraudsters as they gain an extra level of anonymity.
- Many gift cards do not have a scratch off PIN authentication for security.
- There are companies that protect consumer rights and give victims practical support.
A common gift card scam is when a fraudster convinces someone to purchase a card and share the numbers with them so they can then drain the balance.
1. Top Business Targets of Gift Card Scams
It’s good to be aware of useful strategies after being scammed to help minimize losses. To clarify the risks involved in gift card scams, reviews from the PissedConsumer.com platform show how this fraud occurs.
Amazon gift card scams
Consumers buy Amazon gift cards because they are simple to use. Shoppers may think that purchasing a substantial amount may afford some protection. However, as one reviewer says, this is not always the case:
A church member’s contacts were stolen. I received an email requesting $200 in $100 increments from someone pretending to be my friend.
eBay gift card scams
In one eBay review, the customer found their trust had been misplaced when they were told someone had hacked the account and the customer needed to purchase gift cards to resolve the issue:
i panic, got 1400 dollars gift card, give him the pin numbers and all then he redeemed those cards but I haven't received a dime, no money back towards my credit card account.
This customer believes to be scammed by someone pretending to be an eBay case worker and has lost $1648 as a result.
Target gift card scams
Target customers across 21 US states launched a class action suit against Target for allegedly selling fake Apple gift cards. Fraudsters are stealing cards and replacing them with fake ones.
In the recent Target review, one customer explained what had happened to them:
Bought Target gift card for Christmas gift of $25 when my daughter went to buy something with it there was no money in card, but the money was taken out of my account.
Vanilla Gift card scams
Some Vanilla Gift customers have experienced difficulties, such as this shopper who bought two cards and put $500 on each one, but has had all transactions declined.
One of the cards that I was unable to even use for a $10 local purchase was hacked and used for the ENTIRE AMOUNT. So how were the fraudulent transactions PRE-AUTHORIZED If I am unable to use the card?
Walmart gift card scams
Things took an even more dramatic turn for Walmart customers who purchased fake gift cards. The US Department of Justice has just confirmed $4 million in remission payments for affected customers. This Walmart gift card customer explains their situation:
I received a $100 Walmart Gift card for Christmas from my sister. When I went to redeem it, it had $17.46 on it.
Unfortunately, this customer reports that customer service did not help them.
2. Common Gift Card Scams
Gift card scammers use sophisticated tricks to convince customers they need to pay immediately. Here are some key gift card scams.
Family emergency scam
Scammers try to persuade you that a loved one is in trouble, even using voice cloning to trick you. Also, hackers may use stolen emails or social media accounts to send messages claiming to be from friends or family pushing you to purchase an exact gift card and provide them with the required details.
It’s a good idea to contact your loved one before you share anything so you can spot such illegal activities.
Warning signs:
- They ask you to pay straight away.
- They demand you don’t tell anyone.
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.
Company 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. 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.
Prize scams
You get a call from a scammer claiming that you’ve won a prize but you need to pay some fees first if you want to get it. The prize may be anything, from a phone or a car to a holiday trip or cruise.
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.
3. Tips To Avoid Gift Card Scams
Try to prevent gift card fraud by purchasing from trusted stores you have shopped at before. Use these steps so as not to fall victim to fraudsters.
Avoid purchasing cards with easy public access
If you need to buy a card in a store, choose those kept behind the corner and with limited access by visitors. Finding a card in a sealed package is another option to protect yourself from falling victim. The reason is that it is challenging to read numbers and PINs in such cases.
Activate the card in person
When you activate your card, you can verify its legitimacy and quickly solve any issues related to the activation process or discrepancies. In-person activation also allows you to learn better about the card’s terms. So, ensure you have more physical control over the card to steer clear of gift card scammers.
Change the security code
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 finances as soon as possible.
Report to the gift card company
Report any fraud to the company to minimize loss. Keep your receipt and your card as proof. For example, you may use the following phone numbers:
- Amazon: +1-888-280-4331.
- Target: +1-800-544-2943.
- Walmart: +1-888-537-5503.
Visit the company’s website for more information about ways to protect yourself from gift card scams.
Report gift card scams to the FTC
For more support, contact the FTC and fill in their online form to report gift card scams and receive advice.
Always inspect your gift card to ensure it hasn’t been tampered with. Help others avoid gift card scams by leaving a review and sharing your experiences with other shoppers.
Legal disclaimers:
- While every effort has been made to ensure the accuracy of this publication, it is not intended to provide any legal, medical, accounting, investment or any other professional advice as individual cases may vary and should be discussed with a corresponding expert and/or an attorney.
- All or some image copyright belongs to the original owner(s). No copyright infringement intended.
