Fraud & Scams

How to Avoid Gift Card Scams

Cameron Huddleston
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Cameron Huddleston
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January 5, 2022
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How to Avoid Gift Card Scams

Gift cards are an easy way to give when you’re not sure what to get someone. They are also an easy way for scammers to take advantage of unsuspecting victims.

In fact, there have been more reports of gift card scams in the first nine months of 2021 than in all of 2020, according to a new report from the Federal Trade Commission. Nearly 40,000 Americans have reported losing about $148 million to gift card scams this year compared with about 37,000 reports and $115 million in losses last year. However, these figures represent only a fraction of the actual cases and losses because the majority of gift card scams are not reported to the government, according to the FTC.

You can avoid becoming a victim by understanding how gift card scams work and learning how to spot the red flags.

How gift card scams work

According to the FTC, these scams typically start with a phone call from someone claiming that you need to make an immediate payment with a gift card to avoid some sort of negative outcome. Here are a few examples:

  • A caller claims to be with a government agency, such as the IRS or Social Security Administration, and says that you owe taxes or that your bank account will be frozen as part of an investigation unless you buy a gift card and provide the caller with the gift card number over the phone.
  • A caller claims to be with Amazon or Apple and says that there’s a security problem with your account. To fix the problem, you must buy a gift card and send a picture of the numbers on the back of the card. 
  • Someone claiming to be a family member with an emergency asks you to buy gift cards.
  • A caller claims that you have won a sweepstakes or prize but you must pay fees or other charges first with a gift card. 
  • Someone claims to be with a utility company and threatens to cut off your service unless you make a payment with a gift card.

[ Read: Senior Scams and How to Avoid Them ]

Gift cards scammers prefer

In general, scammers prefer gift cards because they are easy for their potential victims to purchase. Once they get the card numbers, they can make purchases anonymously, and the transactions are usually irreversible, according to the FTC.

Scammers often tell victims which gift cards to buy and might tell them to go to several stores to buy cards. These are the gift card brands they most often ask for, listed in order of dollar losses reported to the FTC:

  • Target
  • Google Play
  • Apple
  • eBay
  • Walmart

How to avoid gift card scams

Even the savviest consumers can fall prey to scams. That’s because scammers can be incredibly convincing. However, you can reduce the chance that you’ll become a victim by taking these steps. 

Recognize red flags. Government agencies and legitimate businesses and organizations will not call and request payments to be made with gift cards. If you get a call from someone asking you to buy a specific gift card and to stay on the phone until you provide them with the number and PIN on the card, it’s a scam.

Don’t be afraid to hang up. Even if your caller ID shows a number or name of an organization you recognize, be aware that scammers use technology to spoof numbers. Hang up on any requests to pay by gift card. If you’re worried that a legitimate organization was trying to contact you, call the organization directly.

Use a spam-blocking service. Reduce the number of spam calls you get by downloading a call-blocking app for your wireless phone. Major wireless carriers such as AT&T and Verizon offer their own apps with free and paid versions. There also are third-party call-blocking apps such as Hiya and Nomorobo.

Sign up for account and credit monitoring. Help protect aging parents by taking advantage of technology to monitor their financial accounts. You can use a service such as Carefull to link to their bank and credit card accounts and get alerts by email and text message if Carefull spots unusual transactions such as gift card purchases. Then you can check with your parents to find out if those gift card purchases were gifts or a means of payment for a scam.

[ Find Out: How to Protect Your Identity Online ]

What to do if you become a victim

If you or a parent or aging loved one becomes a victim of a gift card scam, hang on to the gift cards that were purchased and the receipts for those cards. Contact the card issuer immediately to report that the card was used for a scam. The FTC has a list of contact information for issuers of gift cards that scammers frequently request.

Report the crime to your local law enforcement and get a copy of the report, which you might need to provide to the card issuer as proof that you were scammed. Also, report the crime to the FTC at ReportFraud.ftc.gov and to your state attorney general. Even if you avoid falling for the scammer’s tactics, you should report your experience to the FTC and state attorney general so they can investigate it.

[ Keep Reading: What to Do When Your Identity Is Stolen ]


Cameron Huddleston

Cameron Huddleston

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