Avoid Gift Card Scams During This Holiday Season

Gift cards are great for both giving and receiving during the holidays! It is like getting a gift you get to pick out, and that can be very special. What isn’t so great about gift cards is that scammers often use them to take money and leave you with nothing. Coming to understand how to recognize and point out these scams will help you prevent unnecessary loss.

How Does a Gift Card Scam Play Out?

As you would expect, there are many ways that this scam can play out, normally involving a variety of different gift cards and playing on the emotions and processing of a person who is purchasing a gift card. Here are a few different scenarios you may encounter with gift cards:

The Tax Evasion Scare: A target receives a threatening email, text, or phone call from someone impersonating an IRS authority. The scammers scare the target into thinking they must make a payment in the form of a gift card because they are at risk of being arrested for tax evasion.

Luckily, you are now armed with the knowledge that the IRS never corresponds with people through text, email, or phone, but rather through the standard US postal service.

Tech Support Error: In this scam, the target receives a call from a tech support agency like Microsoft or Apple. The target is told that there is something wrong with their account and the person on the other end of the line is willing to help them fix the problem for a small fee, accepted with a gift card.

Luckily, there is actually no problem with your account or computer, and you shouldn’t pay anything. No business will insist on receiving payments only with a gift card, so if anyone insists on payment that way, know that you are most likely being scammed and stop the interaction.

The Needy Romance: The target has a new prospect that they find on an online dating website. But after a length of time, the prospect gets themselves into a situation and asks the target to provide them with some money in the form of a gift card to help them. Sadly, this means typically, they not only want the target’s money but aren’t in the dating mood after all.

The Sweepstakes Winner: The target receives exciting news! They have won a vacation to a luxury hotel on the beach. All that is required is for them to pay a small processing fee using a gift card.

Sadly, no dream vacation has been one and the target loses any money they pay. Plus, it’s always good to remember that if you never entered a sweepstakes, then there is no way you would win one.

The Electricity Scare: A target may receive a phone call or message telling them that their gas and electricity will be cut off if they don’t pay a fee. Luckily, utility companies usually give you more notice, and you will probably know about your unpaid bills.

If you are up to date on payments and haven’t received any other notices, your electricity is probably fine. Instead, you are being scammed and asked for more gift card money. For the most part, unwarranted urgency is part of a scam.

The Discounted Gift Card: A target finds a great deal online: discounted gift cards! They purchase the card and then receive a call asking for the target to read the numbers over the phone to confirm the gift card’s balance. After that, there will be no money left on the gift card at all!

As we go through these common scenarios, you come to notice that many of these scams have similar characteristics like:

• A scammer impersonating someone of authority.
• Playing on your need to fix problems that occur with someone in your personal life or government authorities.
• A person asking you for personal information or numbers on your gift card.

If any of these things begin happening to you when you receive a gift card or are considering buying one, do not comply. Always keep gift card information to yourself and know that most places and people do not accept gift cards as a form of payment.

As you would expect, gift cards should primarily be used for purchases at a specific place or to send as gifts. They are not intended to be used as a system of payment. Just as with all card numbers, they should not be shared over the phone or online, as only you need them to use the gift card.

When you purchase gift cards, make sure the seller is reputable. It is an added guarantee if the seller offers a cash-back guarantee on their gift cards.

What Should You Do If You Encounter A Gift Card Scam?

If you have been unlucky enough to fall target to one of the scenarios above or a similar one, don’t just sit back and do nothing. You can take steps to mitigate the damage and help sellers and other customers prevent further scams.

The first thing you can do is contact the seller or company where you purchased the gift card. Share with them what happened to you and have your gift card and receipt ready to show or read off to them if they ask for it. This brings the issue to their attention, and they can help to prevent it from happening again.

If you continue to hear from the scammer or receive similar messages to the one that got you into trouble, block the number or email and use the report option on your phone to report it—mark emails as spam.

As another precaution, you can report the fraudulent activity to the FTC online. This helps them to see where common scams are happening and do more to prevent them and inform others about what to be aware of!