Scams Part 1: Gift Cards

Today, we are going to look at a common type of scam leveraging gift cards. Scams like this cost Americans millions of dollars every year. According to the Center for Data Innovation, Consumers reported 48,800 cases of gift card scams in 2022, reaching more than $228 million in total losses.This type of scam has become an easy way for thieves to steal large amounts of nearly untraceable cash. The goal of this post is to educate you on what the scam is and how to protect yourself against it.

Gift Card Scams start with an email, phone call, or text message, the person sending the message is often asking you to purchase gift cards and send the numbers on the back of the card to them. Often, it is from a phone number or email address you won't recognize.

The scammers pretend to be someone most would consider trustworthy: government agencies, major corporations, utilities, even relatives with imagined, fake emergencies. The attackers use urgency and pressure, and many people with good intention go purchase gift cards and send the codes back to the scammers. Losing their money and left feeling embarrassed.

Let's take a look at the request itself - payment via gift card. This should be the first red flag. If you owe a business or government institution money they do not want it in the form of a gift card. If someone is asking you to send them payment in the form a gift card, it is a scam, ignore them, hang up the phone, or delete the message. Gift cards are effectively anonymous, instantly transferable cash equivalents. As soon as you read off the redemption codes, the money on those cards is siphoned away to the fraudsters' with no recourse or traceability.

Scammers love to use urgency and sometimes threats to stir up your emotions. The scammers will rush and pressure you by telling you a factitious and urgent story with consequences like account closures, arrests, or even physical harm to a loved one. Their hope is to cause panic and an impulsive response.

So how can you reliably avoid falling victim to a gift card scam?

1. Only by gift cards as gifts for people you know.
2. No legitimate entity will ever demand payment via gift cards, period. It doesn't matter how desperate or coercive the caller, mailer, or texter seems - ignore the message or hang up the phone.
3. If a "relative" from an unknown number or email address is asking for a gift card, reach out to them or someone who knows them on a trusted phone number.
4. If you feel that sense of urgency, take a step back, called a loved one, a friend, and ask for their help in deciding what to do.
5. If you are still in doubt, before you go purchase a gift card send me a message and I can help you navigate the situation. matt@cyberelephants.com