The holiday season is around the corner, and gift cards are one of the most popular and go-to gifts people give to their loved ones—mainly because of their convenience and flexibility.
Gifting a gift card doesn’t require a lot of thought process, allowing the other person to make flexible purchasing decisions themselves through the money or credits added to the gift card. It’s a boon for both businesses and customers. Customers can buy products without using cash or credit cards, and at the same time, businesses see higher engagement and happier customers.
Because of this, gift card purchases are growing steadily each year—with the global gift cards market value expected to reach a whopping $510 billion in 2025 from $320 billion in 2017.
However, the growing gift card popularity comes with its own risks—making it one of the most common prey for cybercriminals. Scammers employ several strategies and gift card scams, tricking customers or gift card holders into buying the gift card and providing them with the gift card number.
This article dives deeper into understanding what a gift card scam is, the various tactics scammers use for this scam, and how you can avoid falling victim to it.
What are Gift Card Scams?
Gift card scams are frauds where scammers trick users or customers into purchasing gift cards and sharing the gift card information, like the card’s code, number, or PIN.
They use several fraudulent strategies, like prize offers, technical support hoaxes, and romance scams, to extract gift card details from customers. Scammers typically prefer targeting gift card holders because of how easy the gift cards are to purchase, the difficulty of tracing them or getting back a refund, and the flexibility to treat them as cash.
Statistics suggest that between 2018 and 2021, gift card scam losses grew 364%, growing at an alarming rate and requiring higher attention than before.
Here’s why gift card scams are so successful:
- Gift cards are anonymous, with no real-life identity attached to them.
- They are super convenient and frictionless, only requiring the card number to make the payment.
- They are much easier to trade in the gigantic world of gift card traders and marketplaces.
- They can be used both online and offline in-store.
Before getting into understanding the types and tips to avoid gift card fraud, let’s quickly look at how they work.
Modus Operandi of Gift Card Scams: How Do They Work?
Scammers employ several tactics to conduct gift card scams. They take place in multiple ways, including theft, cloning, exploiting errors on the merchant’s website, or customer account takeover.
Scammers typically target popular merchant gift cards, including Amazon, Google Play, eBay, Apple, Target, Visa, and Steam.
Most gift card frauds follow the same pattern. Here’s how a typical gift card fraud takes place:
- Fraudsters try to contact you with a reputed and known company to gain customer trust. By impersonating reputed and trustworthy organizations, like Amazon or Apple, through dupe websites or social media accounts, scammers try to promote investment opportunities or cryptocurrency giveaways—stealing personal gift card details. At the same time, scammers can also try to reach target customers over phone calls—making them stay longer on the line and convincing them to share their card PINs and numbers.
- Then, scammers create a sense of urgency by claiming fake facts like your account is compromised, you’re scammed, or you’re behind a payment—making you take quick actions without allowing you to think much about it. At the same time, they may also claim something like winning a lottery or a prize, creating excitement and exhilaration, and you need to pay a specific amount with the gift card before you get the prize.
- Finally, scammers will ask you to buy and provide the gift card details. After convincing the users to share their card numbers or PINs, scammers can get instant access to the card money—asking you exactly which type of gift cards to buy, such as Target, Google Play, Amazon, etc.
Common Gift Card Scam Methods
While gift card scammers target a broad range of individuals, elderly individuals with not much understanding of the gift cards or inexperienced internet users are the common targets of gift card scammers.
Moreover, elderly individuals are more trusting and unfamiliar with the technology—making it easier for scammers to target them.
At the same time, scammers also target individuals with financial needs and distress, younger teenagers with a lack of internet experience and scam awareness, and employees in larger corporations.
Here are the common methods gift card scammers use to trick individuals into providing gift card details when performing a gift card fraud:
#1. Business or government imposters demanding gift card payments
This is the most common and popular gift card scam, where the scammers pretend to be with a known organization, business, or government agent. It typically begins with a phone call; scammers say they’re from agencies like the Internal Revenue Service (IRS), your utility company, or the Social Security Administration (SSA).
Next, the scammers claim things like you own taxes, you’re overdue on payments, and you must make immediate payments via gift cards before anything bad happens or actions are taken.
The scammer will then direct you to purchase gift cards and tell you which type of gift cards to buy.
Several reports suggest that scammers are becoming choosy in demanding victims which brand gift cards to buy and from where to buy them—the common target being Target. The first nine months of 2021 reported users purchasing Target gift cards losing twice as much money to gift card scams than the ones who purchased other brand’s gift cards.
Once you purchase the gift card, scammers demand you share the gift card PIN or codes—stealing all the card credits or money once you share the details.
#2. Gift card giveaways or prize scams
The next common gift card scam is when scammers reach out to target users or victims to let them know that they’ve won a prize or an online giveaway and need to pay fees with a gift card purchase to redeem the prize.
The truth is, no genuine business or organization will ask you to pay money to buy a gift card to redeem a prize or a giveaway.
#3. Discounted gift card scams
Discounted gift cards are another form of gift card scam. While there are genuine and legitimate gift card reselling websites, scammers post too-good-to-be-true card deals on websites like Craigslist, Facebook Marketplace, or OfferUp.
Scammers will sell used gift cards at a discounted price, and often, websites like Craigslist and Facebook don’t have secure buyer protection against gift card scams.
Moreover, they also conduct fake balancer check phone call scams, requesting victims to contact the merchant and share proof of the balance present on the card. Once shared, they then initiate a three-way automated call, asking you to input or provide the card details, like codes and PINs.
#4. Refund or overpayment scams requiring gift card payments
The overpayment or refund gift card scam involves the scammer tricking victims into believing they have overpaid for a particular service or are owed a refund by impersonating a government agent or a reputed company representative.
Once scammers contact victims to share about the overpayment, they convince them to purchase gift cards and provide the card details, like codes or PINs, in order to proceed with the refund process.
This results in the loss of money and gift card credits, which are difficult to trace or recover.
#5. Dating sites and apps scam
Scammers create fake online profiles to “catfish” victims on dating applications, websites, or social media websites. In this scam, scammers pretend to be romantically interested in the victims, requesting them to help them with funds, emergency payments, or fund presents for their loved ones using gift cards.
Statistics suggest Americans lost over $735 million over romance scams in 2022. Thus, being aware of romance scams and avoiding sharing gift card details or funds with an unknown person is critical to avoid falling victim to such scams.
Types of Gift Cards Exploited In the Gift Card Scam
Popular gift cards used in the gift card scam include Google Play, Amazon, Apple, Target, and more. Let’s look at these in more detail.
#1. Target Gift Card Scam
According to the Federal Trade Commission (FTC), 65,000 Americans lost around $228 million in 2022 in gift card scams, the majority of gift cards requested by the scammers being the Target gift cards.
Target gift card scams involve scammers convincing and requesting users’ payments via Target gift cards or tricking users into purchasing Target gift cards that are already void or emptied.
Amy Gac received a phone call from tricksters claiming she would get 50% off her Comcast internet service if she made an upfront payment for two years. And the scammers put another condition: she would have to pay via Target gift cards.
Amy stayed online with the caller, went to the nearest Target store, the Bay Area Target, bought the gift cards, and read the PIN numbers off the back of the gift cards. The moment Amy shared the PINs, the caller hung up the call—making Amy realize the whole thing was a scam.
#2. Amazon Gift Card Scam
The wide use and popularity of Amazon makes Amazon gift cards a common target for scammers.
A Pennsylvania woman received an email from a friend seeking help buying a $300 Amazon gift card for her niece’s birthday. It was only when the two friends met days later that the woman realized the whole thing was nothing but a huge scam.
#3. Apple Gift Card Scam
Apple gift cards involve a range of different scams, including imposter scams to phishing emails, where scammers trick users into sending them Apple gift cards or associated PINs or codes.
A UK resident received an email from her elderly neighbor who recently went through a heart operation, saying they were in the hospital and wished to buy gift cards for their niece’s birthday. The scammer specifically demanded 100 Euros Apple gift cards from Tesco’s website.
The victim helped and sent the bought gift card over email. By the time she realized that it was a scam, it was too late, as she was unable to get a refund for her payment.
#4. eBay Gift Card Scam
eBay gift card scams are also common, where scammers trick users into sharing eBay gift card details and codes or pressuring them to send gift cards as payment, especially for non-existent fees.
Statistics suggest that target users lost $10 million to eBay gift card scams in the first nine months of 2021.
A popular eBay gift card scam was when a rash of users reported receiving phone calls from someone claiming to be AT&T representatives. The callers claimed eBay was running a promotion to spread awareness of their gift cards, saying if they paid $450 of their AT&T bill via eBay gift cards, eBay would match—which was nothing but a scam.
Another real-life instance of an eBay gift card scam was when Steve Dobbins tried buying a $1200 vehicle on eBay Motors with gift cards, and scammers tricked him into sharing the gift card codes and disappearing with his money.
Gift Card Scam Best Practices
Wondering how you can prevent falling victim to gift card scams?
Here are a few effective tips and best practices to follow to identify and stay safe from gift card scams:
- Always verify purchase requests: Verifying the identity of the person asking you to purchase the gift cards and the legitimacy of the bulk gift card vouchers is essential before readily making the purchase. You can directly contact them through their official business numbers, especially if they contact you via unexpected or unofficial phone numbers.
- Be cautious when sharing personal information: Never share personal or financial information, like credit card details, gift card numbers, or PINs, in response to unsolicited requests. Legitimate businesses and organizations don’t ask for such private information. Hence, trust your instincts and refrain from providing such details to anyone you don’t trust explicitly.
- Be wary of unsolicited requests: Scammers pose and pretend to be from tech support, government agents, utility companies, or even friends and families to contact you via phone or email and convince you to purchase gift cards. It’s important to stay cautious of unexpected calls and messages, delete unsolicited emails, and avoid clicking on downloadable attachments and links present in suspicious messages.
- Check for urgency in the messages: Gift card scammers often induce a sense of urgency in their emails and messages, pressuring the targets to act quickly and make instant purchasing decisions. In such cases, take your time to verify the legitimacy of the messages and avoid rushing into buying the gift cards.
- Utilize secure payment options: Ensure using secure payment methods, like credit cards or electronic transfers, as much as possible. No genuine organization or business will ask you to purchase gift cards to make bill payments or pay debts.
- Monitor your accounts: It’s also essential to check and regularly monitor your financial accounts to keep an eye out on unauthorized and suspicious transactions to detect any suspicious activities on time.
- Report potential scams: If you ever suspect that you’re a victim of a gift card scam, you must report it immediately to the respective relevant authorities or the organization involved. Reporting these incidents will not only help you get your refund but also protect others from falling for similar fraudulent scams.
Conclusion
Gift card scams are becoming increasingly popular due to how easy it is to purchase gift cards. Moreover, once you lose your money, it’s very difficult to trace back the transactions or get a refund.
Hence, staying cautious of these scams is highly critical. So, make sure you follow the tips and best practices mentioned in the article to avoid falling prey to gift card scams.
Next, check out the top scammer phone number lookup apps.
