Even if you’re up to date on the newest trends, scammers and online thieves are continually finding new ways to steal from consumers. If you’re concerned about online and offline theft, gift card scams should be at the top of your list. Daily, foreign and domestic scammers discover new and improved cons involving gift cards, to rake in millions of dollars annually.
While it is great to buy or receive a gift card from a friend, family member, or coworker, no one wants to be scammed out of money or tricked online. Unfortunately, many people are victims of gift card scams both domestically, in the United States and worldwide.
How much money do consumers lose to gift card scams?
While the specific amount lost to gift card scams can be small ($5, $10, $20) or large (in the thousands), the total yearly amount reported for 2018 (January to September) was $53 million when all reported loss was combined.
Worse, many of these scams involve a catfish pretending to be someone else, when their only real intent is to scam you out of money, at all costs! Other times, you will fall victim to a gift card scam through someone you know; a fake online company; a threatening caller; as part of an email scheme; or via an algorithm designed “bot”.
Perhaps you can even think back to a time when you shared gift card numbers online with someone you trusted, but now wonder if you were scammed out of money. Learn the secret tricks and tools that scammers use to steal from you, without you even knowing you’ve been tricked!
Gift card scams are when a scammer attempts to collect payment through a gift card.
Why do they do this?
As this type of fraud is faster than being mailed cash and more accessible to collect than your credit card numbers. Gift card scams have many variations, which we will explore below. A gift card scam can happen at a storefront location, online, by phone, or text.
How big of a problem is this type of fraud?
Gift card scams cost trusting consumers so much money that the Federal Trade Commission, Consumer.gov, and the Internet Crime Complaint Center (IC3) have sounded the alarm.
The subtext of their warnings?
If you don’t want to be scammed, educate yourself, stay aware, and use the tools available to you if you are scammed.
If so, you’re not alone. “Gift card scams” is a frequent search in Google, especially during the holidays. The good news is that gift card scams are avoidable if you can recognize the warning signs, learn how these scams work, and what to do (as well as what not to do!).
The FTC has been clearly warning consumers that gift card scams are a mounting problem that requires attention. Gift card scams rose 26% in 2018, from January to September of that year alone. That represents a 7% rise from the year 2015.
While it might be easy for consumers to recognize one type of gift card scam, these scams have many manifestations and are easy to mistake from a legitimate shopping exchange.
Gift card scams typically occur when a victim acquires a gift card and gives the gift card’s numbers (from a card they purchased or were given) to a scammer. The scammer has led the victim on with pretenses and therefore stolen from them when they use their card. However, scammers don’t only rely on this type of scam.
Other gift card scams originate as fake gift card offers. You might receive a fraudulent offer of this type by email or text. However, the scammer only wants to steal your information and use it for identity theft or to acquire your credit card number. Other scammers live in foreign countries like Nigeria, where their scams are part of 419 schemes.
These scammers will come on strong and assertively or pretend to be someone you trust. After they gain your trust, by posing as a business person, romantic interest, or other individuals you think is honest, they will ask you to send them a gift card for an “emergency”.
In reality, there is no emergency, just a need for them to steal from you! Other gift card scams are hidden within fake emails which contain downloadable malware or want your information. Meanwhile, fraudulent phone calls from people posing as family members are grandparent scams.
According to the Federal Trade Commission, consumers lost $53 million in 2018’s on gift card scams alone. That number has surged from $20 million in the year 2015, $27 million lost in 2016, and $40 million in 2017.
Among scam victims who report the fraud to the FTC, 26% said they lost money through a gift card scam, as opposed to 7% in 2015.
The favorite stores used as part of those scams?
Walmart, Target, Walgreens, and CVS. At those locations, online or in person, victims were often told to buy an iTunes or Google Play gift card. iTunes is the top card used in credit card scams, while Google Play cards just began being used more frequently than ever before (as of 2018). Indeed 42% of victims report paying a scammer with either a Google Play or iTunes card.
Specifically:
iTunes was 23.7%, followed by Google Play (18.3%), MoneyPak (3.5%), Amazon (2.5%), and Steam (2.3%)
Perhaps the worst statistic of all:
The median loss from gift card fraud is now $959 as of 2018, which is up 60% from $600 in 2017. Click To Tweet
The Internet Complaint Center’s (IC3) warning on gift card scams explains it well:
This type of scam targets victims, gains their confidence, and tricks them into providing gift card information.
Common sense fills in the blanks. If you ask for someone’s credit card number, they will naturally get more suspicious. However, asking for a gift card inspires altruism in others, and they’re more likely to comply, as they feel as though their data is still protected. Scammers used to ask for cash, but this was often a slow and complicated process since money could get lost in the mail.
However, when a scammer receives the numbers off of a gift card, they can immediately spend the available money before the victim even realizes their con. This allows scammers and thieves to purchase what they want online without being caught.
Now:
What do gift card scams, money laundering, bitcoin, and the black market have in common? It turns out a lot, which means that getting involved with a scammer is no laughing matter.
According to The Daily Beast, scammers have found a relatively quick and easy way to launder money using gift cards on Apple iTunes.
Here is how it works:
Scammers use phone call scams, text scams, social media scams, fake website scams, and email scams to get a hold of gift cards numbers and information, then sell that information on the dark web.
Here is how it works:
The world of bitcoin is ever-expanding and fascinating to many. Essentially, it is an unregulated, bankless world currency, which is publicly viewable and yet private since only transactions codes are listed in the public ledger. Cryptocurrency brokers sell bitcoin for markup and then receive gift cards to secure their purchase.
Here is how it works:
The last thing a criminal wants is a paper trail. By acquiring a gift card registered to someone else, they can buy anything they want in a store or online, with a sense of anonymity. According to The Globe and Mail:
Gift cards are not considered monetary instruments, meaning they do not have to be declared and cannot be seized at the border.
This is why scammers use them:
Scammers use stolen money (laundered or through other stolen credit or gift cards) to buy gift cards. They strike up a deal with someone online and sell the gift card in exchange for cash, at a discount on the card price. They use the money from their stolen (and sold) gift cards to buy expensive items and electronics.
Prepaid gift cards often feature a credit card logo which allows you to use them at most worldwide retailers. These cards can be purchased online, or at most any store, then loaded with anonymous (or stolen) cash.
According to The Globe and Mail’s reporting of forensic accountant Matthew McGuire, who runs a Toronto based anti-money-laundering department consultancy and accounting firm, criminals can disguise gift cards using hacks! These hacks manage to keep data hidden and harder to trace within their smart device or computer.
If you credit scammers with anything, don’t let it be your hard-earned money on a gift card, instead, give them props for their (evil!) creativity. They want to scam you and will say and do anything to make that happen. Their job and how they support themselves is by being a scammer.
Many online scammers live in 3rd world countries, like Nigeria, and their theft allows them to take care of themselves and their family. Nigerian based scammers don’t usually experience guilt, as they assume all Americans have money and affluence.
Amazon doesn’t want their customers or sellers being scammed any more than you do. Amazon accounts for 2.5% of scams and, according to Amazon:
While the specifics of the scams vary, scammers generally follow a common pattern: they connect with a victim by phone, email, through social media, or online; they create a sense of urgency (for example: by offering a great price or mentioning a personal hardship or emergency); they ask for payment using gift cards; and they instruct the victim to purchase gift cards online or at a nearby store. The scammer then demands or instructs the victim to provide the claim code on the gift card by phone, text message, or email - and then disappears.
To avoid this scam:
Since Google Play gift card scams are the second most popular, after iTunes gift card scams, take note! Scammers find multiple ways to trick people into giving them their Google Play gift card information.
While iTunes takes a large chunk of the scammers pie at 23.7%, Google Play gift cardholders are still at risk since Google Play accounts, making up 18.3% of reported scams. According to Google Play:
... ask for gift cards in exchange for taxes, bail money, debt collection, physical items like cars, and more. You can only use Google Play gift cards to make purchases, like apps and music, on Google Play.
To avoid this scam:
iTunes wins as the favorite requested gift card of scammers, with 23.7% of gift card scams involving iTunes cards. According to iTunes, some common scams are, as follows:
We have seen increasing reports of scammers contacting their victims over the phone and coercing them to purchase Steam Wallet Gift Cards to cover payment for taxes, bail, debts, or delivery of money won in sweepstakes. The scammers often pose as agents of official agencies, such as the I.R.S., to convince their victims to comply.
The victim receives a call instilling panic and urgency to make a payment by purchasing App Store & iTunes Gift Cards or Apple Store Gift Cards from the nearest retailer (convenience store, electronics retailer, etc.). After the cards have been purchased, the victim is asked to pay by sharing the code(s) on the back of the card with the caller over the phone.
To avoid this scam:
Steam gift card scams are becoming more and more popular, but the result is the same as other scams, losing money to a website, stranger, or someone you thought you could trust is always wrong. In 2018, Steam made up 2.3% of reported gift card scams.
According to Steam:
We have seen increasing reports of scammers contacting their victims over the phone and coercing them to purchase Steam Wallet Gift Cards to cover payment for taxes, bail, debts, or delivery of money won in sweepstakes. The scammers often pose as agents of official agencies, such as the I.R.S., to convince their victims to comply.
Victims are urged to purchase Steam Wallet Gift Cards at a retail shop in their area. Once the codes have been purchased and activated through the retailer, scammers ask the victims to scratch the codes and read them over the phone.
To avoid this scam:
According to Green Dot:
MoneyPak scams have been around for years. Fraudsters pretend to be utility companies, government agencies, or others and ask for payment in the form of a MoneyPak.
MoneyPak is used in 3.5% of scams. Some common MoneyPak scams involve the scammer threatening arrest, as they claim to be from a government agency or will say they are calling about your unpaid utilities.
They ask you to call them at a specific number and give them the card details after you’ve purchased the card and scratched off the code on the back. Next step, they use your card as this was their intended scam from the get-go.
To avoid this scam:
There is another type of scam which doesn’t need you to reveal any of your data or purchase a scammer their gift card. It relies on technology and bots, rather than people. You won’t know your data has been hacked, as it will occur behind your back, and the hacker may access multiple consumer’s accounts at once.
If you’re lucky, the gift card supplier or company will realize their system has been hacked, but this isn’t always the case. Other times, as Consumer Reports explained, botnet attacks hijack thousands of individual personal computers and devices and use automated actions.
Another “brute force” botnet attack (aptly named “GiftGhostBot” which was discovered in 2017) logged 4 million gift card balance requests per hour, only by using advanced technology to test various combinations of the gift card/account numbers and PIN.
To avoid this scam:
The FTC has reported a rise in worshiper scams. These occur when someone receives a communication (usually an email) from a supposed pastor, rabbi, priest, imam, bishop or other clergy members. These scammers have defrauded worshipers out of nearly $2 million since 2014, roughly half of which were fraudulently obtained during the first six months of 2019.
The email is actually from a scammer whose goal is money for themselves, but you won’t know that yet. Their message and email may appear genuine upon the first read, but a legitimate charity will never ask for a gift card or gift card number.
Look at the actual email address, not just the name or title listed. It won’t be an email from a real church and may also contain typos or spelling mistakes indicative of a foreign scammers message. Follow the FTC’s guide on reviewing legitimate charities.
These are some of the most common and popular gift card scams around.
Just how popular?
Popular enough that the FTC reports $53 million in losses for the year 2018, in gift card scams alone. You can recognize gift card scams by looking for these red flags:
The caller claims to be from the IRS or another government agency (or utility company) and insists that you owe back taxes and a fee or fine and could end up with jail time. They agree to look the other way and forgive your debt if you immediately pay via gift card and give them the information.
Why do people fall for this scam?
The caller sounds legitimate and terrifying. However, no government agency or legitimate company will ever ask for payment via gift card!
This is called a grandparent scam but can happen to anyone. It typically strikes senior citizens and occurs when they receive a phone call at night. The caller on the other end of the line pretends to be their grandchild and says that they’ve been arrested.
They say that the cop or attorney says they will be let go, without jail time, if they pay a fine immediately. The catch, the victim (grandparent) will be asked to purchase gift cards and send the numbers (often in the thousands of dollars).
The victim may even be put on the phone with someone they think is an attorney or a policeman or policewoman. In reality, you will be talking to a scammer and not your actual grandchild or family member.
You’ve been talking to this person for a while. They live far away, and though you’ve never spoken on video chat, they’re the first person you think about in the morning and the last person you think about before bed. You have heard of romance scams. However, this person makes you feel so good that you feel you can trust them.
They have everything you’re looking for, a caring personality, a great job, many interests, and a fun sense of humor. They are working abroad starting a business or on an oil rig, but if you’re “patient” they’ll be back soon, and you can begin your lives together. They encounter a health crisis, computer problem, or work emergency and need money. You send them a gift card(s), not realizing you’ve just been scammed.
Either you purchased it online, from someone who already used the balance available (or it never had one!), or someone stole the code and numbers off the back of the card and used it once you activated it.
You list a gift card for sale, on a seller website or classified ads website. Someone wants to purchase it but asks to talk by phone, with the merchant, on a 3-way call. They say that they wish to the merchant to confirm that the card truly has the balance it is advertised as having. It might make sense to the buyer, and the merchant sounds official. In reality, both people are scammers and in on the con together, or they will have you call the actual credit card company and write down the numbers you give from the card.
Malware can steal information from your computer, and bots are often used on game, dating, and social media sites to make contact and ask you for gift cards. They might do so directly or link you to an outside website and steal your credit card information.
Victims are often tricked by what seems to be a great price or discount offer for popular products! Another bot scam making the rounds is for hackers to use a bot which guesses gift card numbers and drains them of their available funds.
You go to your favorite retailer and use their store’s gift card. You are sure there are funds available, as you purchased the gift card yourself or received it as a gift from someone you trust.
Only problem?
The checker tells you the gift card is empty, as they have secretly switched your card out with a blank card. They suggest you pay in another way. If this happens, report your experience to the manager, as the employee might have received prior complaints. Also, if you have your receipt, contact the gift card company.
You receive an email about a gift card you’ve received as an online gift. You go to the linked website to verify your information, but all you end up doing is downloading malware and exposing yourself to identity theft.
Don’t trust email links and always look at the hyperlink (URL under the words in the email) and “reply to” email sender. If an email offer sounds too good to be true, it probably is.
Another scam, of this variety, is when someone receives an email from their “boss”, asking them to purchase gift cards on their behalf. Instead, they end up buying the gift cards for a scammer who will immediately drain them!
Similar to scam emails, this text will pretend to be from someone you know (boss, family member, etc.) and try and link you to risky external websites. Those websites will want your gift card number and steal it.
Perhaps you now feel as though you know how to recognize gift card scams but still aren’t sure if you’ll notice them in all situations. To protect yourself, follow the FTC’s own guidelines:
As yourself, if you trust the website, you are buying a gift card from. If the website has a strange URL, you’ve never heard of before or came embedded as a link in an unsolicited email, beware! Another warning sign is when gift cards are purchased from an online auction or a classified site such as from Craigslist or eBay. When you buy gift cards through third-party websites, they may be counterfeit, stolen, or already used.
Whether you purchased your gift card online or at a store, you need to be careful once you receive it. The first thing to do is to verify that the protective stickers have not been removed.
The reason for this is that each tangible gift card has a code number that is supposed to be scratched off by the purchaser or recipient. If it has been scratched off before a sale, a scammer might be waiting for the card to activate so they can spend it the moment it is! You should report any damaged cards to the store that has the gift card available for purchase at and not buy it.
Your receipt will help to protect you, but many people throw their receipt(s) away. Whether you were given or purchased the gift card, keep the receipt safe and take a photograph of the receipt for safekeeping.
Check and see if there is an expiration date listed on the card. Take note of any monthly or additional fees to use the card. If you’re ignoring tip #1 and buying it from an outside seller, check the costs for shipping and handling fees.
By making an effort to use a gift card soon after receipt or purchase, you’ll avoid additional fees which might decrease the value of the card. You will also reduce the risk of the card and its amount being compromised.
If you wouldn’t give stranger cash, don’t provide them with a gift card. If you discover that your gift card is stolen or lost, don’t ignore the situation out of embarrassment. These types of gift card theft and fraud situations happen daily, to many otherwise savvy consumers.
If you find that your card is lost or stolen, make contact with the card issuer and report the crime or loss (this will be far easier if you kept the receipt). While this may not protect you in all cases, by taking action, you might be able to get (some) money back or prevent the thief from continuing to use the stolen card.
If you’ve just discovered you were scammed, now is the time to take action. First, call the card company for the gift card which was stolen and report the scam. Some of the most common gift card companies used for scammers are Amazon, iTunes, Steam, Google Play, and MoneyPak. Store gift cards frequently used by scammers are Walmart, Target, Target, etc. After you have done the above, it is now time to report the scam to the FTC.
While you may or may not hear back about your specific situation, you will be doing your part to help stop scammers and imposters from harming others. If the money lost was an unusually large amount, consider filing a police report. If you suspect your credit, bank, or financial information was compromised, you can request a credit freeze.
The FTC has more information of credit freezes, but you can learn from their example, and if you suspect your SSN (social security number) has been compromised, and your identity is stolen or your credit used, you can contact the individual credit reporting bureaus here:
If you experience trouble reaching the credit reporting agencies by phone, you can also contact them by postal mail and request a security freeze. To place a security freeze by mail (make sure also to use certified mail), send the following information in your request:
Here are the credit bureau addresses you should contact for your security freeze:
Another option is Extended Fraud Alert, which will give you seven years of protection.
If you are in the military and deployed on active duty, use this link: Active Duty Alerts
Whether a scammer managed to gain your trust or just lied about who they are and their circumstances, finding out the truth is liberating. However, it may not feel that way at first.
Instead, you may be fired up and angry that the police don’t seem to care if you caught on to the con before any more was lost. Although it’s always good to identify a scammers intentions and keep money in your pocket, you may still have feelings of contempt that you can’t do anything about.
If you want to play a fun prank on your scammer and ease some of that tension, while keeping your private information safe, send them a “fake” gift card. Unlike real gift cards, this one won’t cost you a thing. All you’ll need to do is enter their name (the first name is OK) and choose a (free!) denomination from $50 to $200.
If you want to turn the tables and prank your scammer, do this:
Go to FUGiftCards.com:
Select “Generate Code” at the top right of the page to start the fake gift card.
Enter your name in the “Sender Name” field and the name or username of your scammer in the “Receiver Name” section
Select whether you want to send their gift card to show the amount of $50, $100, $150, or $200. Since it’s a fake gift card, we recommend the larger denomination, as they’re sure to be more enticing to your scammer!
Generate either a “text code” or have the code emailed directly to your scammer.
Once they receive the code and enter it at FUGiftCards.com, they will be directed to an auto-play joke video, which will let them know that you’ve figured out their gift card con and won’t be participating as a victim in their scam.
Try it out for yourself and put the power back in your hands, while keeping money in your wallet!
One of the best ways to stop a gift card scam is before it starts. At Social Catfish, most gift card scam victims report that they saw warning signs and ignored them. These types of warning signs were overlooked as they thought they could trust the person they sent the gift card number to.
In actuality, they should have stopped, and fact-checked the scammers name, phone number, email address, username, and photos. Sometimes, in the case of grandparent scams, all it takes is picking up a phone call and connecting with your real-life relative, to find out the truth. The victims of gift card scams learned their lesson the hard way, but you don’t have to.
Join the revolution and be one of the consumers who is taking power away from the hands of scammers and stopping fraudulent online theft in its tracks. Go to Social Catfish and discover the information that scammers don’t want you to know about!
Search any suspicious phone numbers which call you and verify identity with our high powered algorithm-based tools. Keep money in your pocket and don’t let scammers get rich off of your hard work!
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Social Catfish is an online dating investigation service based in California, USA. We verify information to confirm if the person that you've met online is really who they say they are.
We do in depth checks using our own proprietary online tools to verify things like images, social profiles, phone numbers, emails, jobs and a lot more to make sure that you have the most information about the person that you've met online. We are the only company doing verification of public information such as jobs, phone numbers criminal checks as well as social profiles and images.
SocialCatfish, LLC
25096 Jefferson Ave. STE A-4,
Murrieta, CA 92562
General Inquiries: socialcatfish.com
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