Gift cards make great gifts. They show your loved ones that you know their interests and give them the freedom to select something of their own choice. The great thing about them is that they allow you to circumvent product shortages and shipping delays, which makes them an ideal gift for upcoming holiday celebrations. Due to the supply chain problems, gifts may not be readily available and may be very expensive if they are in stock.

Sadly, their popularity makes gift cards a target of many scams. Luckily, avoiding these scams isn’t too difficult. Learn how these scams work and how you can protect yourself from gift card scams by reading on.

 How Do Gift Card Scams Work?

Scammers usually scare people into giving away gift cards. Usually, they call prospective victims and scare them by telling them they owe money to the IRS or are behind on their mortgage payments. Scammers use something like this to scare their victims into paying up by threatening to send them to jail. In doing so, scammers force victims to purchase gift cards as a form of payment. They then ask the victims to send them an electronic copy of the card or provide the gift card number and PIN.

Occasionally, cashiers will hand you inactive gift cards as part of these scams. You also run the risk of getting scammed if you buy gift cards from online auctions and publicly displayed racks.

Common Types of Gift Card Scams

Gift card scams take place in a variety of ways. Here are a few common scams you should be aware of:

  • The IRS Scam: The scammers can call, email, or text you claiming to be from the IRS. You’re told that you owe your taxes, and you’re going to get arrested. The scammers then ask you to pay these taxes with gift cards. So that they can access the money on the cards, the scammers want you to give them the gift card numbers and PINs.
  • The Fake Prize: You may receive a call from a scammer telling you that you’ve won a lottery or a contest. The company asks you to pay a claiming fee using a specific gift card by sharing the PIN number and number of the gift card.
  • Online Auctions: Some scammers sell inactive gift cards on online auction sites. Some sellers may lie about the gift card’s value and sell you a card with no balance on it.
  • Dating Scam: Some dating scams are very elaborate. Scammers create fake profiles on dating apps, start talking to people, and then ask them to buy a gift card for a fake emergency. Once they have your card information, they disappear forever.
  • Stealing Numbers: Gift card scammers can read numbers stored in magnetic stripes on gift cards by using magnetic stripe readers. The thieves target gift cards displayed on racks and steal multiple gift card numbers at once. Once they have the information they need, they return the cards to the next buyer.

What To Do If You Fall for a Gift Card Scam?

In the event you fall victim to a gift card scam, the first thing you should do is notify the company that issued the card. If you cannot reach the issuer or get them to take you seriously, you should contact the following authorities:

  • Your state attorney general
  • The local law enforcement if you lost money from the card
  • The Federal Trade Commission, which you can do even if you didn’t end up getting scammed. Your report can help them prevent future scams.

Tips on Buying and Using Gift Cards

You should keep the following factors in mind to avoid being scammed when using gift cards.

Where To Buy Gift Cards

The issuer’s online store is the best place to buy gift cards. Check your card for signs of tampering if you’re buying from a physical store. Gift cards that are well-sealed and kept behind counters are safer to buy.

Best Use Practices for Gift Cards

Gift cards should never be exchanged for personal information. You should also use your gift card as soon as possible to prevent falling victim to a scam.

Is your personal information on the dark web? Make sure your identity isn’t at risk!