Gift Cards: A Scammer’s Best Friend

Gift cards are fun to receive and even better to give to others. Need to grab a last-minute gift? Don’t know what to give the person who has everything? Or buying for a teen that prefers to do their own shopping? No matter your circumstance, there’s a gift card for that! 

Racks of gift cards can be found for sale in every store. Their popularity, availability, and ease of purchasing make them a top choice for many consumers. However, those same qualities are precisely what makes them attractive to fraudsters. 

Understanding Gift Card Scams 

Gift card scammers employ deceptive tactics to trick buyers into giving away physical or digital gift cards and sharing PINs or access codes. The scammer instructs the buyer to purchase gift cards and load large sums of money onto the card, at which point the gift card functions like a prepaid debit card. They encourage victims to use gift cards as a form of payment tied to a variety of scams.

Common Gift Card Scams 

There are many ways criminals use gift cards in combination with scams. Here are some of the most popular scenarios concerning gift cards that you may encounter: 

Family Member in Trouble: Someone contacts you, posing as one of your family members needing help. They may claim to have been involved in an accident, were arrested and need money for bail, or some other serious situation. These scams typically target older family members, like grandparents. 

IRS Impersonation: You may receive a communication claiming you have unpaid taxes or some other issue with your tax payments. Any unexpected communication from major government entities like the IRS will always seem scary, and scammers prey on that fear and apply pressure to get you to go against your better instincts. They’ll threaten legal action, including jail if you don’t send immediate payment. 

Business Payments: You receive notice of unpaid bills or overdue balances stating that you must pay immediately to avoid having your account or services being suspended. This tactic is often seen with fraudulent notices from utility companies, as the threat of lost power or water can be detrimental to the household.   

Extortion Scams: A fraudster claims to have hacked into your computer or personal device and has access to indecent photos, videos, or other embarrassing materials. They threaten to share these files with your contacts or publish them online unless you send payment.    

Why Fraudsters Prefer Gift Cards 

The popularity of gift cards comes down to convenience. They’re easy to find and buy and can be used to cover a variety of needs. Unfortunately, those same qualities make gift cards an attractive choice to criminals. 

Here are some additional reasons scammers are drawn to gift cards: 

Ease of Access: Gift cards can be purchased in virtually every store, making them incredibly easy to obtain no matter where you live.   

Instant Payment: Once you purchase the gift card, the scammer will get you to send the access code or PIN on the card immediately. They may ask you to take a picture for verification or send the code to them via text, email, or direct message. Then, they can access the card’s value immediately.  

Untraceable Activity: Purchases made with gift cards cannot be tracked the same way as debit or credit card transactions. Fraudsters know this and use it to their advantage. Plus, it’s almost impossible to recover a gift card balance once it’s spent or replace the funds used to purchase it.   

Common Gift Card Scam Tactics

Many gift card scams employ the same deceitful practices. Understanding these tactics will help you stay ahead of scammers and avoid their tricks. 

High Pressure: A common feature of gift card scams is pressuring you to act immediately, typically under threat of legal action, such as from the IRS.   

Persistence: Whether they’re posing as a family member in need or attempting an extortion scam, the fraudster will remain very persistent in their requests. They will likely send you a flood of messages to keep you engaged and interacting with them. 

Constant Contact: The fraudster may insist on staying on the phone with you while you’re buying the gift cards or bombard you with messages so they can be assured you comply with their request.

Urgency: The scammer will immediately ask you for the access code or PIN on the gift cards upon purchase. They want to waste no time using the money they’ve stolen from you to fund their nefarious schemes. 

Only Use Gift Cards for Gifts 

Gift cards are meant to be gifts for friends and family members, not as a form of payment for bills, taxes, or other needs. Follow these tips to keep yourself safe from scammers. 

Don’t Buy in Bulk: If you’re instructed to purchase a variety of gift cards in varying amounts, it will almost always be a scam. Fraudsters will try to break up the requested amount, making it harder for authorities to track.

Never Share Codes: Never give out the access code or PIN to your gift card to anyone for any reason. Don’t take pictures of gift cards you purchase.

Companies Don’t Accept Gift Cards: Remember that reputable companies and government agencies DO NOT accept gift cards as valid forms of payment (unless it’s a specific gift card for their location). You cannot use gift cards to pay taxes or tax penalties with the IRS, legal fees, or bail money. You also cannot use gift cards to pay bills with your electric, water, or other utility companies. 

Check the Packaging: Carefully inspect the packaging before purchasing any gift cards. Don’t buy any cards that have clearly been tampered with, such as the tops cut off, any stickers peeled back or removed, partially or fully opened, or meddled with in any way. 

While gift cards are versatile and convenient tools for gift-giving, they are also a prime target for scammers. It’s important to be cautious when purchasing and using gift cards to avoid falling into fraudulent schemes. Follow the safety tips outlined to protect yourself and your loved ones.

If you suspect you were targeted by a scam or have been a victim of fraud, contact us immediately. Our team is here to support you and guide you through any issues or concerns. Please stop by any of our convenient branch locations or call 248-322-9800 extension 5 to speak with a team member today.

 

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