Gift cards are designed to be great presents, but to scammers, they’re just another means for snagging some easy money. Here’s what you need to know to avoid getting caught in a gift card scam.
How these scams play out
Gift card scams may start out with a phone call, email, text or social media message from someone claiming to be an authority.
A scammer might pretend to represent the IRS and insist you owe back taxes or mimic a law enforcement agent and tell you that a family member is in trouble — anything to create panic.
They’ll urge you to pay immediately using gift cards, often naming a brand like Google Play, Apple or Amazon, and then asking for the card’s number and PIN. As soon as the scammer has the gift card, they’ll wipe out the card’s balance.
Red flags
Watch for these red flags, which can alert you to a possible gift card scam:
- Demand for gift card payment. If a contact insists you pay by gift card, it’s a scam. Real bills or fines are never paid this way.
- Urgent threats. Scammers urge you to act immediately so you won’t have time to think or ask for help.
- Specific cards. If you’re told exactly which gift cards to buy and where to purchase from, you’re likely looking at a scam. For example, a contact may instruct you to purchase a Visa gift card at the CVS that’s located half a mile from your home.
- Sharing codes. If someone asks for the number or PIN on the back of a gift card, that’s a major red flag. Once a scammer has those codes, they can quickly empty the card.
- Impersonation. Scammers may pretend to be the IRS, a utility company or a panicked friend or family member. Remember: legitimate agencies will never demand payment by gift card. It’s unlikely that your loved ones will, either.
How to avoid gift card scams
Here’s how to avoid falling victim to one of these schemes:
- Stop and think. Legitimate businesses and government offices will never demand payment via gift card. If you’re asked to pay for a transaction this way, take a step back and question the request.
- Don’t share codes. Never give out your gift card number or PIN to someone who calls or emails you, as this is like handing them cash on a silver platter.
- Verify callers. If you’re not sure whether you’re dealing with a scammer, hang up and call the company or contact yourself using a number you trust — not the one the caller provided. For example, look up the IRS number on its official site or call your relative back on a number you know before buying their alleged story.
- Talk it over. Always check with someone you trust before you pay. Scammers will pressure you not to seek out a second opinion, but doing so can protect you.
- Buy cards safely. When purchasing gift cards, choose reputable sellers and inspect the cards carefully. Avoid cards that have scratched-off codes or other signs of tampering.
- Use secure payment. When possible, it’s best to use a credit or debit card for payment, as these methods offer some protection if things go wrong.
What to do if you’ve been scammed
If you believe you’ve been targeted by a gift card scam, it’s imperative to act quickly.
Contact the gift card company immediately and report the fraud. Ask if the card can be frozen or refunded. Some companies can freeze an unused card and return your money. Keep any receipts or emails as proof.
Next, report the scam to the FTC at ReportFraud.ftc.gov. It’s also a good idea to notify your local police department and/or state attorney general. Every report helps authorities track and stop these frauds.