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Buying Gift Cards? Why Do Scammers Favor Gift Cards?

RealCall Team

Cybercriminals are always looking for ways to make quick, easy money, and gift card scams offer them a golden opportunity to use social engineering and sophisticated phishing techniques to score a payday. Many people fall for gift card scams every year. The U.S. Federal Trade Commission (FTC) says that about one in four people who report losing money to fraud says it happened through a gift card scam. In the first nine months of 2021, nearly 40,000 people reported $148 million stolen using gift cards.

What is a Gift Card Scam?

Gift cards are prepaid cards issued by retailers, businesses, or financial institutions. Gift cards have become increasingly popular as a convenient and versatile way to give and receive presents. Once a gift card is purchased and activated, it can be difficult to track how the funds are utilized or where they ultimately end up. When using gift cards, minimal personal information is typically required. The combination of convenience and anonymity makes gift cards an ideal choice for scammers seeking to carry out their fraudulent activities discreetly.

A gift card scam is a type of fraud that involves the use of gift cards as a means to steal money or personal information from individuals. Scammers may try to obtain gift cards through a variety of tactics, such as pretending to be a legitimate company or organization and asking individuals to purchase gift cards as a form of payment or donation. They may also try to convince individuals to give them the numbers and PINs on their gift cards by claiming that they need the information for some reason, such as to verify the individual’s identity or to process a refund.

If someone calls and asks that you pay them with gift cards, that’s a scammer calling. And once they have the gift card number and the PIN, they have your money. 

Scammers may tell you different stories to get you to pay them with gift cards, but this is what usually happens:

  1. The caller may try to convince you that it’s urgent. The caller may try to convince you that you must pay right away or something bad will happen. They may use fear or pressure tactics to get you to act quickly, without giving you time to think or speak to someone you trust. However, do not fall for this scam and do not pay. It is a fraudulent attempt to get money from you.
  1. The caller usually tells you which gift card to buy. If someone calls you and tells you to buy a specific gift card, such as one from eBay, Google Play, Target, or iTunes, and instructs you to go to a specific store, like Walmart, Target, CVS, or Walgreens, it may be a scam. The caller may also ask you to purchase cards from multiple stores to avoid suspicion. They may stay on the phone with you while you go to the store and load money onto the card. If you experience this, hang up immediately as it is likely a scam.
  1. The caller asks you for the gift card number and PIN. To protect your money and avoid losing it, do not share the card number and PIN on the back of your card with anyone, as a scammer could use this information to access and take the funds you have loaded onto the card. It is important to recognize that this is a scam and to take steps to protect your money. If you have already provided this information and lost your money, it may not be possible to recover it.

How do Gift Card Scams Work?

Gift card scams generally start with the scammer contacting their victim through an email, telephone call, or text/SMS/app message. In this scam, crooks contact potential victims and instruct them to purchase or use a gift card to pay a bill or transfer funds.  The scammers often try to create a sense of urgency that compels the victim, saying things like their electricity will be cut off for non-payment unless they pay their bill by gift card immediately. Sometimes scammers prey on people’s fears of getting in trouble at work by pretending to be an executive at the victim’s company who needs money immediately.  

Why do Scams Favor Gift Cards? 

Scammers opt for gift cards due to their ability to provide quick cash with minimal reversibility and maintain anonymity throughout their activities. Moreover, gift cards resemble cash, granting scammers unrestricted access to the funds once they obtain the card numbers and PINs. For instance, prepaid gift cards like Visa or Mastercard can be utilized similar to debit cards, allowing scammers to make purchases or withdraw funds.

The difficulty in tracing and disputing gift card transactions further appeals to scammers. Stores lack the ability to track gift card usage, making it arduous for consumers to prove their innocence if fraud occurs. Consequently, scammers can exploit this lack of traceability to their advantage.

Furthermore, scammers find it effortless to sell gift cards online. They purchase multiple cards, record the card details, and resell them on various platforms. Once buyers activate these cards, scammers swiftly drain the balance, leaving unsuspecting buyers with worthless cards.

The widespread availability of gift cards at major retailers, such as department stores, drug stores, and convenience stores, adds to their appeal. Purchasing gift cards is a commonplace and legitimate transaction, enabling scammers to seamlessly acquire the necessary cards without arousing suspicion.

Notably, gift cards are not tied to specific individuals or accounts. Regardless of whether a card is intended for a particular recipient, the cardholder’s name remains unassociated. From the retailer’s perspective, ownership of the funds resides with whoever possesses the gift card numbers and PINs. This anonymity affords scammers the convenience to exploit and utilize the gift card balances at their discretion.

How to Avoid Gift Card Scams? 

Avoiding gift card scams requires awareness and caution, but it is generally safe to assume that if anyone calls, emails, or messages a potential target asking for gift cards, they’re a scammer. No US local, state or federal government agency will ever ask for payment via gift card, nor will most legitimate businesses include service providers and utilities. If someone receives an unexpected message from a person claiming to be their boss or a colleague requesting a gift card, contact that person directly via telephone or video chat to ensure that they’re really who they say they are. When in doubt, trust your gut and don’t pay with a gift card. 

What To Do If You Paid a Scammer with Gift Cards

If you paid a scammer with a gift card, tell the company that issued the card right away. Keep the card and any receipts you have. You can contact information for some gift card companies:

Amazon Gift Card

eBay Gift Card

Target Gift Card

Walmart Gift Card

Starbucks Gift Card

Visa/Mastercard Gift Card

Google Play Gift Card

iTunes/Apple Gift Card

Steam Wallet Card

MoneyPak Gift Card

Vanilla Gift Card

Call Vanilla at 1-800-690-5234 or visit their website at https://www.vanillagift.com/.

Razer Gold Gift Card

Visit their website at https://www.razer.com/.

American Express (Amex) Gift Card

Call them at 1-800-297-4438 or visit their website at https://www.americanexpress.com/.

Instacart Gift Card

Call Instacart Gift Card at 1-888-222-8999.

Don’t see your card on this list? Look for the company’s contact information on the card itself or do some research online to find out how to reach the card issuer. If you can’t find the contact information or the card issuer doesn’t want to talk to you, report it to the FTC.

Report Fraud

If someone asks you to pay them with gift cards:

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