Gift cards are everywhere. We like them because they’re easy to use and don’t require any paperwork or other red tape to get started.
Yet lurking in the shadows of this seemingly carefree purchase is a predator. The same gift cards that offer convenience are being exploited by scammers looking for easy ways to obtain untraceable, quick cash.
Criminals all have telephones, of course. Have you ever found yourself receiving a suspicious call from someone demanding payment in the form of a gift card? Have you ever received a call from a supposed “IRS agent” demanding payment for back taxes in the form of a gift card? These are all scammers!
According to the Federal Trade Commission, ONLY SCAMMERS will tell you to buy a gift card and give them the numbers that are on it. No real business or government employee will ever ask you to pay them with a gift card.
Government agencies will never contact you and demand immediate payment. If you ever do owe money to the government, you’ll never be asked to pay with a gift card.
Unfortunately, gift card scams are all too real and can catch even the savviest among us unaware.
Let’s take an even closer look at gift card scams so that we have the knowledge we need to spot scams in advance and shield ourselves against them.
How a gift card scam begins
Gift card scams usually start with a call from someone trying to create a reaction of worry and upset in you. Scammers might pose as a friend, government official, tech support guru, or even a romantic interest, all claiming they need money ASAP and that gift cards are the only form of payment that will work.
Some scammers, according to the FTC, are pretending to be employees of Microsoft or Apple. They’ll say there’s something wrong with your computer and they’ll fix it remotely if you pay them with a gift card.
More common is the scammer who impersonates a friend or family member. They’re sophisticated and have the ability to clone the voice of a loved one. They’ll say they need emergency cash and that a gift card is best. They’ll ask you to please keep the delicate situation private. This is intended to deter you from checking with family or friends to verify the emergency.
Scammers sometimes pose as utility company workers and threaten to shut off your water or electric if you don’t pay them immediately with a gift card. SCAM!
Scammers might woo you on a dating website only to try to trick you into sending them money in the form of a gift card. Known as “romance scams,” these scams are proliferating because they work. Remember, gift card scammers are most effective when they’re able to tug at our emotions in order to get us to more easily part with our money.
Another scammer to look out for, says the FTC, is someone who sends you a large check in the mail. They’ll ask you to deposit it but return a small portion to them in the form of a gift card. Since the check is bogus, you will be left with nothing once it bounces, but they’ll have the money associated with the gift card.
Scammers use high-pressure tactics
Imagine receiving a call saying there’s an emergency and you need to buy gift cards right away to resolve it. Your heart would be racing, and that’s exactly what scammers want.
They use high-pressure tactics to put you in a state of fear so that you act before you have time to think. They want you flustered and unable to maintain the composure needed to question what they say.
Remember that a legitimate organization or agency will never demand payment in gift cards, no matter how dire a situation might seem to be.
Scammers might also threaten you with fines, fees, or even arrest if you’re not able to pay them quickly. They often act as if they’re working hand-in-hand with law enforcement in order to put you in a state of fear.
Scammers might ask you to purchase a specific card
You might be asked to purchase an eBay, Target, or Google Play gift card, for example, and you might even be asked to go to a certain store to make the purchase.
Scammers also might instruct you to purchase different gift cards from different stores. They’ll say they don’t want the cashier at any one store to be alarmed.
Scammers might want to stay on the phone with you while you make the purchase.
Remember, anyone asking you to purchase a gift card is a scammer!
The digital age is compounding the problem
In modern times, scammers don’t have to rely on phone calls to target you. They’ll send an email, text, or even slide into your social media. They’ll weave a convincing story and might insist that you to send them the numbers on the gift card or PINs electronically.
Scammers only need the numbers, not the actual gift card itself, to download the money from the card. Once they have the numbers associated with your gift card, they have your money.
The chances of tracing the transaction and recovering your funds are slim. Always treat gift cards the same way you would cash.
How to spot the signs of a gift card scam
Thankfully, there are some telltale signs of a gift card scam that can help you avoid being a victim.
Cast a wary eye on any demand for urgent payment in the form of a gift card. This is always a scam.
In your email inbox, look out for odd email addresses and unprofessional communications. Scrutinize the return address on any email requesting money to make sure it EXACTLY tracks with the agency or person sending the email. Scammers are sophisticated and can closely mimic the phone number and email addresses of legitimate entities.
When in doubt, find the official contact information for the person or entity contacting you and call them yourself using the contact information you found (not the information they provided).
Protecting yourself from gift card scams is about staying informed and being proactive. Educate yourself about the latest scam tactics and be wary of any requests for gift card payments, especially those that seem urgent. These are always, always scams.
Can you ever get your money back?
The FTC recently announced that some gift card companies are able to freeze stolen gift card money so that scammers can’t use it. To increase your chance of getting your money back, report any scams to the gift card company ASAP. They’ll need the numbers on the gift card or information from your receipt.
Tell them you want your money back. If the money wasn’t yet accessed by the scammer, they might be able to return it to you.
If the money was already accessed by the scammer, it’s likely gone.
Below are links to the websites of some companies issuing gift cards. They have web pages devoted to the issue of gift card fraud, so this might be a good place to start if you’ve been defrauded. (If your gift card is from a company not listed here, you should find their contact information on the gift card.)
The FTC also wants to hear from you. If you’ve been scammed, report it at the FTC’s website. The FTC can’t resolve your individual complaint, but they’ll use it to press charges when they see recurring fraud from certain entities.
The Federal Bureau of Investigation operates an Internet Crime Complaint Center (IC3) that’s sometimes able to recover lost funds. You can report a gift card scam to them at the IC3 website.
In conclusion
Gift card scammers might be sophisticated, but your knowledge about them is your best defense. Stay informed, keep your guard up, and remember that no legitimate person will ever demand payment in the form of a gift card.
By arming yourself with knowledge, you’ll be able to outsmart the scammers and keep your hard-earned money out of their greedy hands.