Gift cards can make for great gifts. They show your loved ones that you know their interests and give them the option to pick something of their own choice. They’re an ideal gift for the upcoming holiday celebrations because they’re an excellent way to work around product shortages and shipping delays. Problems with the supply chain mean that gifts won’t be readily available and may be very expensive even if they are in stock.

Unfortunately, the popularity of gift cards makes them a target of many scams. Luckily, spotting and avoiding these scams isn’t too difficult. Keep reading to learn how these scams work and how you can help protect yourself from possible gift card scams.

 How Do Gift Card Scams Work?

Scammers mostly rely on scaring people into giving away gift cards. They usually call prospective victims and scare them using high-pressure tactics, like telling them they owe money to the IRS or are behind on their mortgage payments. Scammers use something like this and scare victims with false threats like sending them to jail if they don’t pay up. By doing so, scammers force the victims to buy gift cards as a form of payment. Then, they tell the victims to send them an electronic version of the card or provide them with the gift card’s number and PIN.

Some cashiers also carry out these scams by handing you inactive gift cards. Buying gift cards from online auctions and publicly displayed racks can also result in you getting scammed.

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 and claim to be from the IRS. They tell you your taxes are unpaid, and you’re going to get arrested for it. Scammers then ask you to pay these taxes using gift cards. The scammers want you to share the gift card numbers and PINs, so they can access the money on the cards.
  • The Fake Prize: Scammers might call to inform you that you’ve won a lottery or a contest. They ask you to pay a claiming fee with a specific gift card by sharing the card’s number and PIN with them.
  • Online Auctions: Some scammers sell inactive gift cards on online auctions. Others may lie about the gift card’s value and sell you a card that doesn’t have the promised balance.
  • Dating Scam: Some dating scams are really elaborate. These scammers make profiles on dating apps, start talking to people, and then ask them to buy a gift card for a made-up emergency. After you send them the card’s details, they disappear completely.
  • Stealing Numbers: Gift card scammers can read the numbers stored in magnetic stripes of gift cards by using magnetic stripe readers. These thieves target gift cards displayed on racks and steal the numbers of multiple gift cards in one go. Once they have the information they need, they put the cards back for the next person to buy.

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

After falling for a gift card scam, the first thing you should do is inform the company that issued the card. If you can’t contact the issuer or get them to take you seriously, then you should report the scam to 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

To ensure you don’t get scammed using gift cards, you should keep the following factors in mind.

Where To Buy Gift Cards

It’s ideal to buy gift cards from the issuer’s online store. If you’re buying from a physical store, check the card for any sign of tampering. It’s safer to purchase gift cards that are kept behind counters and are well-sealed.

Best Use Practices for Gift Cards

You should never give away personal information in exchange for a gift card. Also, use your gift card as soon as possible to avoid falling victim to a scam.