What are gift card scams?

Gift cards may be used for a variety of reasons, such as birthday and holiday gifts, but they may also present an avenue for scammers to take advantage of unsuspecting individuals.

Gift card scams generally involve deceptive tactics where scammers trick people into purchasing gift cards and then have them share the card details or PIN. Typically, these scammers impersonate authority figures, relatives in distress, or service providers, coercing victims into believing they need to buy gift cards as payments or solutions to fabricated problems. Once scammers obtain the card details, they can swiftly drain the funds, leaving victims financially compromised.

This guide will dive into how gift card scams may work and potential ways to avoid them.

How do gift card scams work?

While gift card scams can vary widely depending on a scammer’s approach, here’s how they typically work:¹

1. Posing as a government entity, friend or family member, or a business representative, the scammer initiates contact, often with an email, text, call, or social media message.
2. The scammer creates a sense of urgency by fabricating a scenario like an overdue payment or emergency, compelling the victim to take immediate action.
3. The victim is coerced into purchasing gift cards to solve the issue. The scammer may even instruct them to purchase the gift card from a specific store.
4. The scammer instructs the victim to share the numbers and PINs off the back of the cards.
5. With the card details, the scammer virtually redeems the funds, leaving the victim at a financial loss, even though they still have the physical card.

Why do scammers want gift cards?

Gift card scams are among some of the most common scams because they provide fraudsters with an anonymous and untraceable method for stealing funds.

Once they receive gift card details, scammers can quickly convert them into cash or make online purchases. Because gift cards typically don’t store or link to personal information, scammers can easily evade detection.

How to spot and potentially avoid gift card scams

Here are some potential ways people can spot and protect themselves from gift card scams:

• Verify the caller or sender’s identity. Government agencies and other legitimate business entities do not demand payment in gift cards for taxes, fines, or additional fees. If someone claims to be a family member in need, verify their identity by directly contacting the family member or someone close to them.

• Be wary of urgent, unsolicited requests. Scammers often create urgency; take time to assess the situation.

• Stay educated. As scams become more complex, stay informed about common scams to recognize red flags and potential threats.

• Purchase gift cards directly from trustworthy stores. Utilize reputable sites or physical store locations when purchasing gift cards. Make sure to inspect all gift cards for signs of tampering before purchasing.

What to do if someone has been gift card scammed

If a person suspects that they have been a target of a gift card scam, here are some next steps they could take:

• Contact the gift card issuer immediately. Provide them with store receipts, a picture of the physical gift card or card information if a virtual gift card, and other relevant details about the scam.

• Report the scam to the Federal Trade Commission (FTC). This increases the likelihood that law enforcement successfully catches the scammer and prevents others from falling victim to the scam.

• Save all communication records. Providing law enforcement with all the emails, text messages, and relevant documentation related to the scam can allow them to investigate and take action.

• Stay informed and warn others. Learn about evolving scam tactics, and alert friends, family, and social circles about the scam to prevent them from becoming victims as well.

Learn about online shopping safety.