How to Spot and Avoid Gift Card Scams

On the surface, gift card scams are just like any other scam, since they prey on the same emotions. But there’s an interesting and weird sort of nuance to them that appeals to modern scammers more than the classic methods of parting their victims from their money.

As a result, gift card scams have been on the rise for a long time, and are becoming a consistent part of many scammers’ repertoires.

What is a Gift Card Scam?

Gift card scams are one of those types of scams that are defined by the method of payment rather than the method of extortion.

As a result, they can basically be any other type of scam you might expect. The only commonality is that they demand payment in the exact same manner: they tell the victim to buy a gift card, then give them the code and pin for it.

After that, the scammer removes the money from the card or uses it, and the money is gone.

There are a few very common types of scams that have added the gift card “twist”.

A Friend in Need

The scammer contacts you claiming to be a friend or loved one who is in immediate financial straits. They need help and fast, so you need to give them money…via gift card.

This scam is, for obvious reasons, performed primarily via texts and email, and is usually going to come as a result of one of your friends or family members being hacked or their phone number spoofed (see here for more details on that).

However, that doesn’t mean you should expect to be safe just from a phone call. Phone scams are common, and sometimes it can be hard to tell voices over the phone, especially if it’s someone you haven’t talked to in a while.

Important Note

People with compromised mental states, such as individuals with Alzheimer’s are especially at risk and are in large part who scams like this prey on. If you have a friend or loved one with such a condition, it’s good practice to help them differentiate between legitimate and scam calls.

If you get a call like this, it’s usually best practice to directly contact whoever is claiming to be in trouble to see if things are all right. Even if the call is legitimate (unlikely), there’s usually a much better way to help them than paying for some gift card.

Bill Payment Extortion

The scammer contacts you, usually via a call, claiming to be from some legitimate agency that is demanding payment for some service or debt. This may be a credit card company, the IRS, one of your utilities (eg. water and electric companies), or any other company.

These ones are often the most believable, right up until they ask for payment via gift card.

Best practice: ignore the call. You can always call whatever service they claim to be from directly, or go to their website to see if there are pending payments. Get into the habit of never paying a bill unless it’s on your terms.

Legitimate businesses are not going to claim false urgency, and more to the point will never ask for payment via gift card in the first place.

Romance Scammers

“Romance scammers” are people who contact you via a dating site or some such (rarely are these scammers audacious enough to try and extort someone they’ve met in person this way) and then try to pump you for money, or gift cards in this case.

If you encounter this, it’s worth just sitting and thinking for a moment.

Take a moment to put aside your feelings and think about what kind of person will immediately start asking for money upon first getting into contact with someone, or even after a little bit into the courting phase for some longer term scammers.

This might be more hardening of the heart than you might initially be prepared to do, especially given the sob stories many of these individuals have put a lot of practice into coming up with, but the gift cards should be a big clue.

Asking for money outright is likely to be more effective, but it is also much more traceable in many cases. Gift cards are an odd option if someone is in financial trouble, as since some are versatile they’re always going to be a bit less flexible and useful than cash in the bank.

The main benefit of a gift card scam is that it’s relatively untraceable. They get the money, or the benefits of the money for less flexible gift cards, and it’s very hard to track them down if they were taking basic precautions and using an alias.

Anyone asking for payment via gift card should be treated as inherently suspicious.

Check Fraud 

Check fraud is another broad, common type of scheme, but the gift card variant is one of the more popular.

The general idea: someone sends you a check as payment for some service. This could be selling something on Ebay or a similar site, some job you did for them, or anything really.

They will point out the overpayment as a mistake, and tell you to deposit the check anyway, then send them the difference on a gift card, usually citing some kind of problem with their bank that would prevent them from just writing a new check and having you cancel the other one.

 They may even, ironically, cite a lack of trust in you to cancel the check as if you’re prone to scamming people as well and get hostile if you refuse.

If you were to actually buy them their gift card…well, now you’re completely out of that money. The check was fake to begin with (something you won’t really get to see for a few days since it takes a bit of time for a check to hit with most banks) and now you’re out the money for the gift card, the “overpayment”, and whatever service or goods you sold them to boot.

What Do You Do if You’re a Victim of Gift Card Fraud?

If you realize you’ve been had, don’t panic. You do have options.

The first thing you should do is contact the company that you got the gift card from via their customer service. Explain what has happened, and they’ll have a department that can help you. Usually they can shut down the gift card, and sometimes are even fast enough to prevent it from being used if you have a sudden enough (if sadly too late) realization that the scammer has fooled you.

By the Way…

Don’t be afraid to call just because you fear you’ll look foolish. Cases like these happen all the time.

If you’re lucky, you can even get the money refunded to you, though sometimes this may not be the case depending on your exact circumstances and how long it’s been since the fraud occurred.

Thankfully, gift card scams usually involve fairly small amounts of money, all things considered, so you’re not going to be out thousands of dollars.

It may also be a good idea to contact your bank, especially if you were a victim of the check fraud variant of the gift card scam. 

Likewise in that case, contacting the business you were scammed through never hurts. Ebay, for example, has a dedicated fraud hotline you can call, as do many similar reputable online sellers.

Finally, report the name, number, email, and any other information you have on the scammer to the Federal Trade Commission (via ReportFraud.ftc.gov). DO this even if you didn’t fall for the scam, as even if the information is fake every little bit helps in trying to track down and catch these types of criminals.

Reporting them to local law enforcement never hurts either.

Things to Remember:

  • Gift card scams are common and hard to trace.
  • No legitimate business will ever ask you to pay for something via gift card.
  • People asking for payment via gift card are inherently suspicious.
  • Never offer to reimburse the difference on overpayments.
  • Always call a friend, family member, or even business yourself rather than trusting an unsolicited phone call.
  • Report scammers to every possible authority you can think of.

Keeping these things in mind go a long way toward helping you avoid gift card scams.

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