You know that moment when you think, “Oh, gift cards are the perfect solution for those hard-to-buy-for folks”? Well, scammers love that moment too! Turns out, gift cards have become the new currency for fraudsters, and in 2023 alone, they swiped $217 million through gift card-related scams. Let’s unwrap this shady gift together.
Gift card fraud made up a staggering $217 million of the total $10 billion lost to scams in 2023. Convenient for consumers, but also easy pickings for scammers, gift cards bypass traditional fraud-prevention methods, leaving many vulnerable.
How It Works:
Gift card fraud operates through various schemes, including:
- Impersonation Scams: Scammers pose as trusted companies, asking victims to purchase gift cards and send the details, only to drain the funds once received.
- Fake Returns: Fraudsters use stolen credit cards to buy items, then return them for gift cards using fake tracking numbers or IDs.
- Tampered Cards: Some scammers simply steal the gift card’s barcode or PIN before the card is activated, waiting for the buyer to load it with money, then drain it remotely.
Once the fraudster has the gift card details, they can either sell them at a discount or use them for personal purchases, making it extremely difficult to trace.
Who’s Targeted:
While everyone is at risk, scammers often target:
- Older adults who may be more trusting or less familiar with gift card scams.
- Consumers during holidays when gift card purchases skyrocket.
- Businesses through phishing or impersonation schemes.
Real-Life Example:
A recent AARP survey revealed that 34% of U.S. adults or someone they know had been targeted by scammers demanding payment through gift cards. Of those, 24% followed through, providing scammers with the activation codes, and 25% had received or given a gift card that had already been drained. These stories are all too common, with many victims only realizing they've been duped after the money is gone.
Why You Should Care:
Losing money through gift card fraud can happen fast, and once the funds are drained, they’re almost impossible to recover. Scammers take advantage of the convenience gift cards offer, turning them into untraceable, cash-like currency. Whether you’re buying gift cards for friends or receiving them, the risk of losing out to fraud is real.
How to Protect Yourself:
Here’s how you can safeguard your hard-earned gift cards:
- Inspect Before Purchase: If you’re buying a physical gift card, make sure the packaging hasn’t been tampered with, especially the barcode or PIN section.
- Store Safely: Keep your gift cards secure, just like cash. Don’t leave them lying around or send details via email or text unless you trust the recipient.
- Use Cards Quickly: The longer you wait to use a gift card, the more time scammers have to drain the balance.
- Buy from Trusted Retailers: Whether online or in-store, make sure you’re buying gift cards directly from reputable sources.
- Beware of Unsolicited Requests: If someone calls or emails claiming to be from a trusted company or authority and asks for payment via gift card, it’s likely a scam. Hang up, delete the message, and report it.
Quick Tips:
- Did you know? Many scammers drain gift cards by tampering with the packaging. Always check that the card hasn't been altered before purchasing.
- Pro Tip: Some retailers now store gift cards behind the counter to prevent tampering. If you’re unsure, ask about this when buying your cards.
Have you or someone you know ever been a victim of gift card fraud? Share your experience—your story might help someone else avoid getting scammed!
Stay safe, stay informed,
Key Terms Explained:
- Impersonation Scam: When a scammer pretends to be a trusted person or company to trick you into giving them money or personal information.
- Fake Tracking ID (FTID) Scheme: A fraud tactic where scammers use fake tracking numbers or identification during returns to get refunds or gift cards.
- PIN: A Personal Identification Number used to access the funds on a gift card.
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