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Protect Yourself from Gift Card Scams: Understanding and Avoiding Gift Certificate Trade Fraud

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Gift cards are a popular and convenient gift, but they’ve also become a favorite tool for scammers. If someone is asking you to purchase gift cards to make a payment, especially for something unexpected or urgent, alarm bells should be ringing. Remember, legitimate businesses and government agencies will never demand payment via gift cards. This article will guide you through understanding gift card scams, recognizing the tactics used, and most importantly, how to protect yourself from becoming a victim of Gift Certificate Trade fraud.

The Federal Trade Commission (FTC) emphasizes that any demand to transfer money to “protect it,” withdraw cash, or purchase assets like gold and gift cards is a scam. Be vigilant and informed to safeguard your finances.

Learn more about money transfer scams

How Gift Card Scams Operate

Gift card scams often begin with unsolicited contact – a phone call, text message, email, or social media message. Scammers are masters of manipulation and will use various stories to trick you into buying gift cards, typically from well-known brands like Google Play, Apple, or Amazon. They then demand the gift card numbers and PIN codes to access the funds. Here’s a breakdown of their common strategies:

  1. Creating a Sense of Urgency: Scammers thrive on pressure. They will insist on immediate payment, claiming dire consequences if you don’t comply instantly. This tactic is designed to prevent you from thinking clearly or seeking advice from trusted sources. Don’t fall for the pressure. Slow down, verify the situation, and never rush into payment. Urgency is a major red flag for a scam.

  2. Specifying Gift Card Type and Purchase Location: Scammers are often very specific about the type of gift card they want and where you should buy it. They might direct you to purchase gift cards from eBay, Google Play, Target, or Apple, and instruct you to buy them from specific retailers like Walmart, Target, CVS, or Walgreens. Sometimes, they will even guide you to multiple stores to avoid raising suspicion with cashiers. In some cases, they will stay on the phone with you throughout the process, from going to the store to loading money onto the card. If anyone dictates exactly which gift cards to buy and where, it’s a scam. Hang up the phone or cease communication immediately.

  3. Demanding Gift Card Numbers and PINs: The ultimate goal of the scammer is to obtain the gift card number and PIN. These codes on the back of the card are like cash. Once they have them, they can drain the funds instantly, even if you still physically possess the card. Never provide these numbers to anyone you don’t know and trust, especially if they contacted you unexpectedly. Treat your gift card PIN like your bank account PIN – keep it private. Do not send photos of the card either, as this reveals the necessary information.

Common Gift Card Scam Scenarios

Scammers are constantly evolving their stories, but many gift card scams fall into familiar patterns. Recognizing these common scenarios can help you stay protected:

  • IRS or Government Impersonation Scams: Scammers pretend to be from the IRS or another government agency, claiming you owe back taxes or fines and threatening arrest or legal action if you don’t pay immediately with gift cards. Remember, government agencies will never demand payment via gift cards.

  • Tech Support Scams: Scammers pose as tech support representatives from well-known companies like Microsoft or Apple. They claim your computer has a virus or security issue and demand payment via gift cards to fix it. Legitimate tech support will not ask for gift card payments.

  • Romance Scams: Scammers build online relationships and gain your trust, then invent a crisis and ask for financial help, often requesting gift cards. Never send gift cards to someone you’ve only met online, especially in a romantic context.

  • Emergency Scams (Grandparent Scams): Scammers pretend to be a family member (like a grandchild) in trouble, needing urgent financial assistance for emergencies like medical bills or bail money, and request gift cards. Always verify such requests independently by contacting family members directly through known numbers.

  • Lottery or Prize Scams: Scammers claim you’ve won a lottery or prize but need to pay fees or taxes via gift cards to claim your winnings. Legitimate lotteries or prizes do not require you to pay to receive your winnings.

  • Utility Company Scams: Scammers impersonate utility companies, threatening to shut off your power or water if you don’t pay your bill immediately with gift cards. Utility companies have standard procedures for payment and will not demand immediate payment via gift cards.

What To Do Immediately If You Paid a Scammer with a Gift Card

If you realize you’ve been scammed and paid with gift cards, act quickly. Time is of the essence to potentially recover your funds:

  1. Report to the Gift Card Company: Contact the gift card company immediately and report the scam. Provide them with as much detail as possible, including the card number, PIN, and store receipt if you have it. Many companies are working to combat gift card scams and may be able to freeze the funds if they haven’t been fully redeemed yet. See the contact list below for major gift card companies.

  2. Request a Refund: Specifically ask the gift card company if they can refund your money. While not guaranteed, some companies have policies in place to assist scam victims. It’s always worth asking.

  3. File a Report with the FTC: Report the scam to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov. Your report helps the FTC track scams and take action against scammers. Every report contributes to a larger effort to combat fraud.

How to Contact Gift Card Companies to Report Scams

Here is a list of contact information for major gift card companies to report scams. Keep this list handy in case you ever need it. Always keep copies of your gift cards and store receipts as they will be helpful when reporting.

Amazon

American Express

Apple, iTunes

  • Call 1 (800) 275-2273 and say “gift card” to connect with a representative.
  • Website for scam information: Apple Gift Card Scams

Best Buy

eBay

Google Play

MoneyPak

ReloadIt

  • Call 1 (888) 633-9434 and follow the instructions.
  • Website for scam information: ReloadIt

Sephora

Steam

Target

  • Call 1 (800) 544-2943 and follow the instructions.
  • Website for scam information: Target Security

Vanilla

  • Call 1 (833) 322-6760 and follow the instructions.

Visa

Walmart

  • Call 1 (888) 537-5503 and follow the instructions.
  • Website for scam information: Walmart Fraud Alerts

If your gift card company is not listed, check the card itself for contact information or search online for “[Gift Card Company Name] contact information” or “[Gift Card Company Name] report scam”. If you are unable to reach the card issuer, report the scam to the FTC.

Safe Practices for Buying and Using Gift Cards

Gift cards are intended for gifts, not for payments to businesses or individuals you don’t know. To minimize your risk of gift card scams, follow these guidelines when purchasing and using them:

  • Purchase from Reputable Sources: Buy gift cards directly from trusted stores or their official websites. Avoid buying from online auction sites or third-party resellers, as these cards could be fake, stolen, or already drained of funds.

  • Inspect Before Purchase: Carefully examine the gift card packaging before buying. Ensure the protective stickers are intact and have not been tampered with. Check that the PIN on the back is securely covered and not visible. If you notice any signs of damage or tampering, choose a different card and inform a cashier or store manager.

  • Keep Records: Always keep a copy of the gift card (take a photo of the front and back) and your store receipt. This documentation will be crucial if you need to report fraud or if the card is lost or stolen. The card number and receipt details are essential for filing a report with the gift card company.

By staying informed, remaining vigilant, and following these safety tips, you can significantly reduce your risk of falling victim to gift card scams and protect yourself in gift certificate trade scenarios. Remember, if something feels suspicious, it probably is. Always trust your instincts and err on the side of caution.

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