Gift cards have become a staple in the world of modern shopping. But before you grab one from that colorful kiosk, you should be aware of the potential pitfalls. While gift card sales skyrocketed from $130 billion in 2015 to $173 billion in 2021, they have also become a popular target for criminals as they can buy them anonymously and redeem them remotely. Researchers estimate that $40 to $50 billion is stolen through gift card scams each year.
There are two typical scams involving gift cards: cards purchased that have a zero balance and gift card payment scams.
Zero value on the card
A zero-balance gift card scam is when you buy a gift card, only to find out later it has no value left on it. Crooks tamper with cards on store shelves, steal the numbers on the back, and drain the cash loaded on them. According to a 2022 AARP survey, one in four adults has given or received a gift card that turned out to have no value. Protect yourself by purchasing gift cards online directly from the issuing business, carefully examining cards at the store for signs of tampering and buying cards from stores that keep gift cards behind the counter or at the checkout.
Gift card as payment?
Criminals have devised another sneaky tactic: tricking people into purchasing gift cards as a form of payment. Imagine you get an email saying you won a million dollars in a sweepstakes and all you have to do is buy gift cards to “pay fees (or taxes)” to claim your prize. According to the survey respondents, the sweepstakes scenario was the most common tactic, constituting about 15% of gift card payment scams. Next most popular was being asked to pay in advance for a service or product (12%) or help a friend or colleague in need (12%) and lastly, to pay someone’s phone or utility bill (10%). Protect yourself by knowing that if someone asks you to pay for something with a gift card, it is a scam.
Beware impostors
These fraudsters also impersonate friends, coworkers, or even religious leaders to gain your trust. For example, you might receive an email from your “minister” asking you to help others in need by purchasing gift cards and emailing them photos of the front and back of the cards. If someone you know asks you to purchase gift cards for a good cause, call them to be sure it is not an email from a scammer.
If you encounter a gift card scam, call the AARP Fraud Watch Network Helpline at 877-908-3360 (4 a.m. to 4 p.m. Alaska time, Monday-Friday). They can guide you on what to do next and how to avoid future scams. Report losses to your local police and insist they take your report. Persistence can help in recouping losses if the criminals are caught.
You should also file a complaint with the Federal Trade Commission online or by calling 877-382-4357, or with the FBI Internet Crime Complaint Center. Staying alert and informed can help you navigate the gift card minefield safely.
Happy shopping! And remember, if you can spot a scam, you can stop a scam.
Teresa Holt is the AARP Alaska state director.
