6 Gift Card Scams to Avoid

Everyone loves gift cards. Unfortunately, scammers do too. Gift cards are often used to commit fraud. Here’s what you need to know about how to avoid these scams.

Types of gift card scams

  1. The IRS gift card scam. A threatening message that’s allegedly from the IRS claims you’re at risk of arrest for tax evasion unless you pay up immediately. However, they insist that payment can only be made in the form of a gift card. As you know, the IRS always asks for tax payments in the form of gift cards.
  2. The tech support gift card scam. In this variation, a caller pretends to be tech support at a recognized company, like Apple or Microsoft. They’ll insist there is something wrong with your computer and offer to “assist” in fixing the problem. Payment can be made with a gift card, of course. There is nothing actually wrong with your computer; you’ve just been targeted by a scammer.
  3. The romance gift card scam. You’ve been chatting with a new love interest who you met through a dating website. Suddenly, they’re in a sticky situation, and the only way out is a gift card from you. This scammer probably isn’t who they claim to be and is taking advantage of your emotions.
  4. The sweepstakes gift card scam. Congratulations — you’ve won a trip to the Cayman Islands! You just have to pay the small processing fee via gift card. Unfortunately, you’ll never see that vacation.
  5. The utility bill gift card scam. You don’t want your gas or electricity cut off, do you? If you don’t pay up with a gift card, the lights might just go out. They won’t, but if you fall for it, you’ll be out of the money you spent on the gift card.
  6. The balance-check gift card scam. You spot a discounted gift card up for sale online and happily buy the card. The seller will send you the card, but then ask you to read the numbers over the phone to confirm the balance. Then the seller has all the information they need to use up all the funds on the gift card.

How to spot a gift card scam

A little bit of knowledge goes a long way in recognizing gift card fraud:

  • The IRS will never initiate correspondence by phone call, text message, or email. Instead, they will send a letter to taxpayers through the U.S. postal system.
  • No authentic business or government agency will insist on payment by a gift card.
  • If you don’t recall entering a sweepstakes, chances are you didn’t win it either.
  • A caller or message claiming a matter is urgent and demands immediate action is nearly always a scam.

In general, gift cards should be purchased to send as gifts, and not as payments. Also, as with all sensitive information, the numbers on your gift card should never be shared over the phone or online.

Finally, it’s best to only purchase gift cards through reputable sellers or those that have excellent customer reviews and/or offer a cash-back guarantee.

If you’ve fallen victim to a gift card scam

If you’ve paid a scammer with a gift card take immediate steps to mitigate the damage.

First, contact the company that issued the card as soon as possible. You can find the customer service number for most companies on the card itself or through a quick Google search. Tell the representative what happened. Hold on to the receipt and the actual card for proof should it be needed.

Next, if the scammer continues to contact you by phone, text message, or email, do not engage further. Block the scammer’s number from your mobile device and mark their emails as spam.

Finally, report the incident to the FTC and alert your family and friends about the scam.

Check out these 10 ATM Safety tips for more fraud prevention suggestions.