An Ultimate Guide On Gift Card Scam

Although it is simple to buy gift cards, there are many pitfalls to be aware of along the way, as even in this field of online shopping, fraudulent activities of criminal gangs are monitored.

In one of the more common gift card scams, a criminal will call you or send you a text or email message claiming to be working with the IRS. Let’s see why do scammers want gift cards as well as how do gift card scams work.

Why Do Scammers Want Gift Cards?

Online gift cards are used only for gifts. This type of e-card is not for payments and the cardholders are not able to pay with them for goods or services. It is only possible to redeem them. And since they are less secure for buyers in comparison to other payment methods, gift cards are preferred by scammers that is why they are very popular among them.

If someone asks you to pay with the gift card, it does mean that a scammer is behind the call. And be aware that no government agency or private company will ever insist that you pay for goods or services with a gift card. If they ask you to do this, they are trying to deceive you. Once they receive the gift card PIN or number, they steal your money.

How Gift Card Fraud Schemes Work

Here are some examples of how do gift card scams work:

A scammer calls you and claims to be from Apple or Amazon. It warns that there is a security issue with your account. The only way to solve it is to buy a gift card and send him the gift card numbers or PIN code on the back. Fraudsters often point out which gift cards to buy and where to buy them.

Sometimes victims are instructed to make purchases at different stores, and during this process some scammers keep their victims on the phone while they complete the task. Once you provide the gift card number and any security code that is present on the card, the scammer will be able to access those funds.

Most Common Gift Card Scams

Gift card fraud is real. The fraudster steals money from gift cards in different ways. The most common is the way when a scammer trick victims into giving the numbers on the back of a gift card. Meanwhile, it is better not to disregard the following sophisticated gift card scams methods.

IRS Scams

Imposters impersonate IRS employees and it sounds very convincing. They call taxpayers in sophisticated ways using fake names and IRS identification numbers. Scammers blame their victims, for example, for not paying taxes or bills and emphasize the urgency of payment. The victim is required to pay with a specific e-gift.

Note that the IRS does not demand immediate tax payment or use a specific payment method. And, especially, they don’t threaten to bring in immigration officers or local police to arrest people for not paying.

Bots Stealing Your Balance

Sometimes hackers go straight to the source and use a bot – GiftGhostBot. It runs through the check system in the store online looking for gift card numbers which are valid. Once scammers have code they can sell gift cards on the “darknet”. Usually they use cards themselves.

In-store Tampering With Cards

Fraudsters don’t just work online. They go into stores that sell gift cards, scratch off the PIN, and put on a new sticker. Then they wait for the card activation and the balance replenishment, they immediately use the card for their own purposes.

You Won A Prize!

Some scammers use a way to deceive the user with a prize or winnings. But to get it, you need to pay a fee via gift card. The prize can be anything from a car to a trip – it goes without saying that there is no prize and it is a hoax.

Phishing Attempts

Gift cards are also used to trick users into handing over their personal information. This is a classic phishing attack where scammers send an email or social media notification with an offer to receive a gift card. The only condition is to send personal and possibly financial data, which the fraudster can later use in identity fraud.

How Scammers Convince You

Scams target people of all backgrounds and ages. They know psychology very well, therefore they easily build trust in the relationship with the victim, committing illegal actions. In most cases scams succeed because they look like the real thing and catch you off guard when you’re not expecting it.

Scammers can hide behind attractive social media photos and lure you into long-distance romance, but it will cost you.

They defraud you of money on various pretexts: mother care, tuition fees, or for charitable organizations.

In the case of gift cards, scammers can use fake payment systems sites or advertise goods with an incredible discount.

Or they impersonate business or government officials who ask to be paid in gift cards.

Scammers are getting smarter and taking advantage of new technology, new products or services to create believable stories convincing you to give your money through gift cards or personal details. Be aware that no government official nor reputable company or the IRS will ever ask to be paid in gift cards.

What To Do If You Became A Victim Of Gift Card Fraud

If you are being scammed or detect fraudulent activity don’t feel ashamed or embarrassed – it’s important to report it and get the help you need. The following steps should be taken for this:

Contact The Gift Card Issuer

Reach out directly to the organization the potential scammer professes to represent. You can also tell the card issued company right away. We strongly recommend not calling the number given to you on message or responding to the email and clicking any of the links inside of it.

File A Police Report

Immediately report the scam or suspicious activity to your local police department. Report the scam even if you didn’t pay.

Fite The Report To FTC

If someone asks you to pay with gift cards it is better to report fraud to the FTC. To do this on the Federal Trade Commission official website choose the button “Report Now” and follow the further instructions.

Report The Fraud To Your State Attorney General

You can also report a scammer to your state attorney general. Use their online form to report a breach. The Attorney General receives more than 50 000 complaints each year, which allow them to fight on your behalf.

Gift Card Fraud Prevention

Now, take a look at our information on how to prevent gift card fraud and to spot them for some simple tips on keeping your personal details and money secure.

Buy At The Stores You Know And Trust

As you know gift cards fraud schemes range from the most traditional to very creative. Be careful when shopping online. Тhe best way to avoid the gift card scam is to only buy and sell them from/to a reliable retailers that are legit.

Double Check The Card

Double check your unused card balances as soon as you get it. If you notice that the balance is gone, then contact the issuer immediately.

Never Enter Personal And Financial Details After Unsolicited Contact Online

Never send money or give cards, bank, online account details or copies of personal documents to unknown organizations or persons. Scammers often ask to use an unusual payment method, including gift cards, reloadable cards, iTunes cards or cryptocurrency.

Use Cards As Soon As You Can

Use cards as soon as you can after receiving them. This is the best way which can help to avoid gift card scam. It leaves little opportunity for a bot mentioned above to find a card in the system.

Keep Your Receipt

In case you buy the e-card on an offline store we recommend you keep your eye on it and check the card number on the activation receipt. Тhis is done in order to ensure that it matches the card number as well.

The Importance Of Online Data Security And How To Ensure It

There are many steps you can take to protect yourself from money fraud and improve your security online.

  1. Do not underestimate the fact that scammers exist and they steal your money.
  2. Never provide gift card details to someone you do not trust
  3. It Is very important to know who you’re dealing with and the consequences of any transaction to an unknown person.
  4. Do not click on suspicious links or pop-up windows.
  5. Delete all the text and attachments in emails from unknown.
  6. Don’t respond to phone calls about your computer asking for remote access – hang up
  7. Don’t share your personal details.
  8. Choose your passwords carefully and keep them secure.
  9. Check your security and privacy settings on social media and review them.
  10. Beware of any requests for your details or money.
  11. Shop only on reliable websites and be wary of unusual payment requests.

Conclusion

When someone calls you convincingly offering a product and asks to pay via gift card, it’s probably a scam. Most commonly fraudsters call the victims with a sense of urgency using the element of surprise “to capture” them, for example – unpaid taxes or utility bills debt. They keep victims on the phone offering to resolve these kinds of problems. As a unique solution scammers ask to buy a gift card and provide the card’s code as payment.

Keep in mind that most legitimate companies and government agencies won’t ask for gift cards as a form of payment.

Frequently Asked Questions

Why Do Scammers Want Gift Cards?

  • Scammers want gift card because they can be used to purchase a huge range of goods and services. Among other reasons:
  • It is easy to purchase it at online or offline stores.
  • They are available in most retailers and well-known brands.
  • They have fewer security measures compared to conventional payment cards.
  • The inability to restore the gift card balance or refund it when the funds disappear.
  • No need for fraudsters to provide bank account details for payment, they only need a PIN code or certificate number.

How Do Gift Card Fraud Schemes Work?

All fraudulent attacks work according to a certain scheme: the scammer calls the victim in order to sow panic and convince them to urgently pay for something using a gift card. To quickly resolve the problem, he may even advise you to purchase a card at the nearest store or on some website. Once the victim purchases the gift card, the fraudster will be asked to make a payment by dictating the code on the back of the card over the phone.

Which Are The Most Common Types Of Gift Card Scams?

The scammers:

  • claim to be working with the IRS and say that you owe unpaid taxes;
  • use a bot called GiftGhostBot who drains your gift card balances;
  • work as a shady cashier in an offline store and keep your activated card giving you a card that doesn’t work;
  • steal the numbers of the gift card with a magstripe reader scanning a magnetic stripe;
  • sell gift cards through online auctions that cannot be never activated or have a zero balance;
  • ask you to pay a fee to claim the fake prize that you supposedly have won;
  • call and claim to be a representative from the public utility saying that you owe money.

What Should I Do If I Become A Victim Of Gift Card Fraud?

Take these actions if you fall victim to a gift card scam:

  • Contact the retailer that issued the gift card.
  • Report the fraud to the FTC.
  • Report to your state attorney general.
  • File a police report.

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