Crooks love a good gift card scam. It’s like stealing cash right out of your pocket.
That includes Amazon and Target gift cards, Apple and Google gift cards, Vanilla and Visa gift cards too. Scammers go after them all.
In the U.S. and Canada, the Better Business Bureau (BBB), the Federal Trade Commission (FTC), and the Canadian Anti-Fraud Centre have issued warnings about several types of gift card scams floating around this time of year.
The scams fall under three broad categories:
Payment scams — Here, gift card scams take their classic form. A scammer asks for payment with a gift card rather than a payment method a victim can contest, such as a credit card. When victims realize they’ve been scammed, they have no way of getting their money back.
Bogus balance-checking sites — These sites promise to check the balance on gift cards. However, they’re phishing sites. Entering card info into these sites gives scammers everything they need to steal the card balance for themselves.
Gift card tampering — This involves draining gift cards of funds after they’re purchased. Organized crime rackets steal the cards from stores and then restock them on shelves — only after they’ve scanned the barcodes and pin numbers or altered them in some way. When a victim purchases and activates the card, the crooks launder the money and leave the victim with an empty card.
Why all this focus on gift cards? They truly are as good as cash. When that money is gone, it’s gone. Yet better, it can get whisked away electronically quicker than the quickest of pickpockets.
Fortunately, you can avoid these scams rather easily when you know what to look for.
Gift card scams — just how bad is it out there?
Not great. According to the U.S. Federal Trade Commission (FTC), they received nearly 50,000 reports of gift card fraud in 2022. Those losses racked up more than $250 million. Through September 2023, the BBB and FTC reported a 50% increase in cases of gift card scams over the same period in 2022. So far, that accounts for 29,000 reports and $147 million in losses — a figure that will surely climb much higher as October, November, and December roll by.
Affected cards include the usual list of well-known and reputable brands, such as Walmart, Target, Apple, Google, Amazon, Best Buy, and the Steam gaming platform. Back in 2021, Target gift cards racked up the biggest losses, an average of $2,500 per victim, according to the FTC.
Canada has seen a jump in reports as well. According to the BBB and the Canadian Anti-Fraud Centre, January through August 2023 saw roughly 1,200 reports with $3.5 million in losses for an average loss of roughly $2,900.
What are scammers asking people to pay for with gift cards?
If you can imagine a transaction of any kind, a scammer will likely try to get you to pay for it with gift cards.
Some of the more striking examples include scammers who pose as dog breeders who take gift cards as advance payment. They also lurk in online marketplaces and local buy-sell groups, preying on victims looking to buy anything from furniture to golf carts.
And as we’ve reported in the past, scammers often pose as government officials. In these cases, they level heavy threats and demand payment for fines and back taxes, all with gift cards. That’s a sure sign of a scam.
Some scammers go to greater lengths by setting up phony online stores that only accept payment with gift cards. One high-profile example — the phony ticket sites for major sporting events like the Super Bowl and World Cup. Many of those sites offered gift cards as a payment option. In other instances, scammers set up similar bogus storefronts that sell lower-priced items like clothing and bags.
Lastly, we come around to those gift card balance-checking sites, which are really phishing sites. As reported by Tech Times, a user on Reddit uncovered a paid Google ad that directed people to one such site.
Source, Reddit
The ad is on the left. The phishing site is on the right. Note how Target is spelled as “Targets” in the ad, and the address on the phishing site is entirely different than Target.com. Yet that doesn’t stop the scammer from asking for all the info they need to steal funds from the card a victim enters.
How to avoid gift card scams.
Bottom line, if anyone, anywhere, asks you to pay for goods, services, or debts of any kind with a gift card, it’s a scam. Additionally, here’s further advice from us and the BBB:
1. Remember that gift cards are for gifts. Never for payments.
This reinforces the advice above. The crooks who run gift card scams pose as utility companies, the government, lottery officials, tech support from big-name companies, even family members — just about anyone. Yet what all these scams have in common is urgency. Scammers use high-pressure tactics to trick victims into paying with gift cards. And paying quickly.
2. Look for signs of tampering with your physical gift card.
Earlier we mentioned gift card tampering, where scammers either copy or alter the card info and then steal funds when the card is purchased. Signs of tampering include a bar code that’s affixed to the card with a sticker, a PIN that’s been exposed, or packaging that looks like it’s been altered in any way. If possible, purchase gift cards that are behind a counter where they are monitored. This can decrease the risk of purchasing a gift card that’s been tampered with. Also, save your receipt in the event of an issue.
3. Purchase online gift cards from reputable retailers.
One way you can avoid the tampering scenario above is to pick up online gift cards. Several reputable retailers and brands offer them.
4. Check your balance at the retailer or with their official app.
Both can tell you what your card balance is, securely and accurately. Avoid any site online that offers to check your balance for you.
5. Treat your gift cards like cash.
That’s what they are. If the brand or retailer issuing the card allows you to register the card, do so. And if it further allows you to change the PIN, do that as well. This way, you can report card theft with an eye to getting your money back — while changing the PIN can help keep scammers from using the card altogether.
What can I do if I fall for a gift card scam?
If you fall victim to a scam, report it. Organized crime operations big and small often run them, and reports like yours can help shut them down.
More ways to beat the scammers — with online protection.
Online protection like ours offers several features that can help steer you clear of scams. It can detect suspicious links, warn you of scam sites, and remove your personal info from sketchy data broker sites.
Text Scam Detector: McAfee’s patented and powerful AI technology helps you stay safer amid the rise in phishing scams. Including phishing scams generated by AI. It detects suspicious URLs in texts before they’re opened or clicked on. No more guessing if that text you just got is real or fake.
Web protection: And if you accidentally click on a suspicious link in a text, email, social media, or browser search, our web protection blocks the scam site from loading.
McAfee Personal Data Cleanup: Scammers must have gotten your contact info from somewhere, right? Often, that’s an online data broker — a company that keeps thousands of personal records for millions of people. And they’ll sell those records to anyone. Including scammers. A product like our Personal Data Cleanup can help you remove your info from some of the riskiest sites out there.
More sound advice. Stick with known, legitimate retailers online.
It’s gift-giving season, so it comes as no surprise that we’re seeing a spike in gift card scams. What makes this year’s jump so striking is the trending increase over last year’s numbers.
Remembering that gift cards are for gifts and never for payments can help you from falling for one of these scams. That and inspecting gift cards closely for tampering or opting for an online gift card can help as well. And as always, strong online protection like ours helps keep you safer from scammers as you shop, go through your messages, or simply surf around.
