Federal Trade Commission officials often remind consumers that gift cards are for gifts and never for payments. But despite their warnings, tens of thousands of people fall victim to gift card scams each year. Approximately $148 million was stolen through gift cards purchased by 40,000 people in the first nine months of 2021 alone. With many people choosing not to report their blunders, the actual number of victims is likely much higher.
Gift card scams target both younger and older consumers and can happen through phone calls, social media messages, texts, or emails. Gift card scams are popular because they give the scammer anonymity and make it nearly impossible to track money or get it back once it is sent.
To help consumers avoid deception, we’ve compiled the most common tactics used by scammers today, tips on how to spot them, and the necessary steps to take if a gift card scam happens to you.
1. The desperate family member scam
Imagine answering the phone to hear the voice of a young girl claiming to be your granddaughter. “I’m in a lot of trouble and need you to send me the numbers of a $400 Walmart gift card right away! I don’t have time to explain, just please hurry… and don’t tell anyone about this,” she begs. You’re confused and panicked, but want to do anything you can to help your loved one.
Before you know it, you realize that was not your real granddaughter and that you’re now out $400. The warning signs of a scam in this situation are the involvement of gift cards, the urgency, and the pressure to not get anyone else involved.
If you receive a call like this, it is important to stay calm, hang up the phone, and call a member of that person’s close circle or the person’s real number to confirm or debunk the story.
2. Online dating scam
Another impersonation scam is being asked for money by a person that you have only met through an online dating site or app. The scammer will spend time earning your affection before trying to convince you that they need help paying for flights, medical expenses, or other debts.
In these situations, it’s best to play it safe and never send money to someone that you have not met in person. You can also protect yourself from romance scams by doing a reverse image search on any pictures associated with the person’s account. If the search results come back showing the same pictures attached to another name, you can be certain that it is a scam.
3. Fake government official scam
Impersonating a government entity or official is another very common impersonation scam. A caller will try to convince you that they are from the IRS and ask that you send a late tax payment through gift cards. They may also claim to be from Medicare, the Social Security Administration, your power company, or any other person of authority.
In these scams, the caller will often threaten jail time or a loss of benefits to pressure you into sending them money. They may even have pieces of your personal information, like an address or full name, to use as leverage. What you need to know is that any real government agent or utility company would never call to demand money or threaten you. If you’re still worried, you can look up and call the real number of whatever agency the scammer is claiming to be a part of to contact them directly and learn what is really going on.
4. I.T. support scam
Senior citizens are often the target of scams in which criminals pretend to be a member of I.T. support. You might receive an email or phone call from someone claiming to be a computer technician or your phone provider asking for gift card codes to pay for services, prove account ownership, solve a security issue, or any other number of time-sensitive issues.
If you never filed a complaint about any of your services and are not expecting to be contacted about these matters, it is a scam. It is best to ignore these messages and reach out to someone you can trust if you do have technological concerns.
5. You won a prize!
While many gift card scam operations will happen by phone, social media has its own threats as well. These tend to target younger consumers, as they make up the largest percentage of social media users. A scammer may send a message through social media to tell you that you won a prize, but you must pay a small fee with a gift card in order to claim it. Or, they could say that you have won a valuable gift card, but you need to fill out an online form with your personal information to receive it, ultimately stealing your information for profit.
LifeLock has tools to monitor the use of your personal information online in these cases that could be easy to overlook. Overall, when it comes to winning anything online, its a good idea to be skeptical. If it seems too good to be true, it probably is.
6. Fake barcodes
This gift card scam tactic is unique in that it doesn’t involve any type of interaction with the scammer. The scammer prints out their own barcodes and places them over the real ones. When the gift card is activated, all of the money is loaded right into the scammer’s account instead of the consumer’s gift card as intended.
The only way to protect yourself from this tactic is by examining the gift card closely before buying. Look for any unevenness on or around the barcode. You can also crosscheck the numbers on the back of the gift card with those on the packaging to make sure that they match.
Spotting common gift card scams
Gift card scams are constantly evolving. To protect yourself from new threats, it’s a good idea to familiarize yourself with common scammer tactics so that you can be prepared to spot the signs when someone is trying to scam you or a loved one.
Creating a sense of urgency
Any situation that creates a sense of urgency related to sending payment through gift cards is meant to use your emotions against you to steal your money. Take the fake granddaughter’s phone call as an example. If the scammer had not used words like “please hurry,” or “right away,” it would have reduced the situation from a dire emergency to just an odd phone call.
Allowing a potential victim to think through their situation, without the pressure of any time-related threats, increases the chance that they will figure out what’s going on and debunk the scam. Scammers recognize and take advantage of the fact that it is nearly impossible to think clearly while in fight-or-flight mode. Anyone demanding immediate payment on the other end of the phone can not be trusted.
Asking for specific brands
Reports from the FTC show that scammers will usually ask for specific gift card brands or ask you to buy from a specific store. The scammer may also demand to stay on the phone throughout the trip to the store to ensure that the transaction is completed.
Another common tactic is for the scammer to coach the victim through their interactions with cashiers. For example, if a store associate were to ask what the pricey gift cards were for, the scammer would be in the victim’s ear telling them to say, “oh, just gifts for a party.” A scammer might also insist that the gift card purchases be made at multiple different stores to stave off suspicion from employees or other shoppers who could step in and stop the scam. Any circumstance where a stranger is telling you what to do in regards to your money is a scamming tactic. Scammers will use their confidence to exploit a victim’s trust and maintain control over the situation.
In many of these gift card scams, hanging up and doing your own research online on what may be happening is a good course of action. But, if you don’t feel confident enough in your technical skills to use the internet as a resource, there are other options that are just as effective. Ask someone for help sorting out the situation, like a tech-savvy grandchild or trusted advisor. While there are a growing number of gift card scamming tactics, there are just as many ways to avoid falling victim to one.
Already sent a gift card? Here’s what you can do
If you get involved in a gift card scam, know that you are not alone. Every year since 2018, both the number of reported gift card scams and total monetary losses have increased, according to data from the FTC. After realizing that you’ve paid a scammer, contact the gift card provider as soon as possible to report the situation. The contact information will be on the gift card itself. Keep the card and receipt on hand. Report the fraud to the FTC at ReportFraud.ftc.gov. These reports are used to investigate bad business practices in collaboration with law enforcement. While you may not get your money back, filing a report helps protect against fraud from happening to others.
Trust your instincts, do your research, and consider protecting yourself with LifeLock identity theft protection—the most trusted and highest-rated identity theft protection available.