The Rise in Gift Card Scams

Gift cards scams don’t just affect people buying goods over local sales pages anymore. Scammers are increasingly requesting gift cards in impostor scams in a variety of industries. In 2019, reported losses due to gift card scams totaled $102.9 million compared to $39.7 million in 2017. Scammers have turned to gift cards because they are untraceable and can be quickly resold online. People are wiser now about not giving away their credit card numbers and wire transfers are under more scrutiny from the FTC, but once numbers are read off a gift card, the scammer can immediately use or resell the funds anonymously.

Scammers will target businesses and employees through Business Email Compromise. After researching online, they will use the boss’s name and a similar email address structure. The employee opens an email that looks like it’s from her boss, and she’ll see an urgent request asking her to buy gift cards for a birthday gift or a gift basket with her own money. Once she sends the requested picture of the back of the card, that gift card and her money are gone. Always verify any unexpected request directly with the person involved, even if it seems urgent or involves your boss.

Scammers impersonate government officials, family members, tech support, military members and clergy, often either preying on the sympathy or fear of the victim. Government impostors are rampant in the personal sector, posing as IRS agents, Social Security, or even requesting gift cards because someone didn’t show up for jury duty. Gift cards are for gifts, never for payment. No legitimate government agency, business or tech support will request a gift card as payment.

Victims are most likely to recoup losses when the deception is realized quickly. Contact the business that issued the gift card as soon as you realize you have been scammed, and report the theft to the FTC. Major retailers are even training employees to recognize potential victims buying gift cards if they are purchasing large amounts on multiple cards, on their phone the whole time, or look frantic. The FTC has a toolkit stores can use to alert consumers they might be part of a scam.

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