Twas the night before I should’ve had everything done
All the stores ransacked, nothing left to get my husband and son.

As I scrolled thru the Amazon app looking for my hard-to-please teen
In disbelief, nothing could be delivered before January 19!

I had to act fast, think quickly, and hard
I know…I will get them all a hefty gift card!

The next morning, as they unwrapped their cards, a silence would fall
Through tears of happiness, they all asked, ‘Can we go to the mall?’

They gleefully ran up and down the aisles and stuffed their carts full
Next, they unloaded their treasure on the conveyer belt, time to pay the toll

As the cashier slid their gift cards numerous times through the reader
My throat dried up and my balance began to teeter

Loretta, the nice lady behind the counter said
These gift cards are no good, they’re all comin’ up dead.’

I had to get a second job and let my real nails grow out
I moved in with Loretta because my family kicked me out

The gift cards I had bought were scammed and had been sucked dry
Cybercriminals are hard at work, swindling and stealing, shifty and sly

If you take just one piece of advice away from all of this
Make sure your gift cards haven’t been tampered with!

What is a Gift Card Scam?

Gift cards are used prevalently by consumers around the world. They are easy to purchase and can be used in a pinch for gift-giving or just to say thank you. However, Cybercriminals have become very creative in scamming us out of money by the way of gift cards. Unlike credit cards, gift cards have very little to no protection and are often used in stealing money. These scams can start with a phone call, text, email, or social media post. They can even happen in person, inside a brick-and-mortar store. However, by understanding how gift card scams work, you can protect yourself from becoming a victim. Let’s examine the most common types of gift card scams so that the warning signs can be recognized and these gift card fraudulent schemes can be avoided.  

6 Common Gift Card Scams to Avoid:

  1. IRS or Government Agency Scam – In this scam a customer gets a message from a scammer pretending to work for the U.S. Internal Revenue Service or another government agency. They tell the customer that to avoid being arrested for tax evasion, or for failure to appear for jury duty, they need to pay a fine. Then they tell the scam victim to pay using a gift card, such as an iTunes gift card. It may seem like this is an unlikely scam, however, an IRS iTunes gift card scam article claims that Americans have been swindled out of almost $40 million from it.  It is important to remember that no reputable company or government agency will ever demand payment through gift cards.
  2. Fake Gift Card Activation – In this scam a fake website is created with a similar address to the activation site. Generally, when a person has a gift card that needs to be activated, a website and telephone number are listed on the back of the card. Before using the card, the user needs to go to the website and enter the gift card number, expiration date, and card verification code. Scammers hope that people accidentally land on their fraudulent site instead of the real activation site. They lure people to their site with keywords that allow their website to appear at the top of search engine results. When someone enters the card information on the fake website, the scammer steals the card information and activates it themselves on the correct website. The most telling clue in this scam is that the website address at the top of the page does not match the address listed on the card.
  3. Balance Check – The scammer uses a 3-way call to intercept a gift card number in this scam. When a gift card is listed for sale on a classified ads website, the scammer makes an offer and asks the seller to confirm the balance on the card by calling the merchant in a 3-way call.  While listening to the seller enter the gift card number, the buyer records the touch tone numbers entered on the phone. Then the fake buyer can use the gift card without paying for it. It is natural for the buyer to want to verify the amount on the gift card, so this is an easy way to be fooled. If someone asks to listen to your balance inquiry on a phone call, it is likely a scam.
  4. Stolen Gift Card Number – This scam involves a gift card on display in a store. The thief removes a card from a display and records the number. Then the card is returned to the display. Once a customer buys the gift card, the scammer keeps checking until a balance is loaded onto the card. Once the balance appears, he or she uses the gift card number online. This is usually done in a smaller store where there are limited gift cards available. A way to avoid this type of scam from happening to you is to pick a gift card from the middle of the rack or from a less frequented area of the store.
  5. Malicious BOTS Stealing Balances – Hackers use a BOT to scan a business’s online gift card balance check system to look for a gift card with an activated balance. Once the BOT finds a match, the scammer uses the gift card or sells it.  To avoid this scam, do not activate a gift card unless you plan to use it right away. The longer an activated card sits in a registry, the higher the chance is that a BOT can steal it.
  6. Store Employee Scam – When a customer hands a gift card to the cashier for activation, the cashier activates a different card and gives the original card back to the customer. Or the cashier activates the original card and hands the customer an inactive card. Another version of this scam happens when you pay for something with a partially redeemed card. The cashier swaps it for a fully redeemed card and claims that there is no balance left on your card. It is important to remember how much is available on your card when using it. These cashier gift card scams are often seen in big chains like Walmart with long lines, lots of transactions, and many employees.

What To Do To Avoid These Scams?

Empower yourself and others by learning how to protect your devices and your personal online information from Cyber-attacks! Gift card scams are just one way your data can be breached.

If you ever get a phone call from someone telling you to make a payment with a gift card, hang up the phone. If you get an email from a company telling you to make a payment with gift cards, delete it. Only sell gift cards to a reseller that is reputable and offers a money-back guarantee. When purchasing gift cards, select cards that are less accessible. Inspect the gift card to make sure the packaging doesn’t look altered in any way. When checking out with a gift card, make sure that the number listed on the activation receipt matches the number on the card you receive. Lastly, when activating a card, make sure you type in the website address, rather than do a search. This is the best way to avoid landing on a fake site.

Tips for Safely Buying and Using Gift Cards:

  • Only purchase cards from legitimate merchants. Stick to stores you know and trust.
  • Examine the card before you buy it. Make sure the protective stickers are on the card and the card has not been tampered with.  Make sure the PIN number on the back is not showing.
  • Always keep your receipt. This, or the card’s ID number, will help you file a report if you lose the gift card or suspect a scam has taken place.
  • Read the terms and conditions listed on the gift card.
  • Activate the card in person if possible.

What Do I Do If I Have Been Scammed?

If you think you are being scammed, contact your local authorities and/or directly contact the company that the potential scammer is claiming to be. The company can add the scammer to a registry of known gift card scammer numbers and hopefully will be able to compensate you.

Here is some contact information for reporting some gift card scams:

Amazon gift card scams: Call Amazon support at 1 (888) 280-4331.

eBay gift card scams: Contact eBay customer support.

Google Play Store scams: Contact Google scam support.

iTunes or Apple gift card scams: Call Apple Support at 1 (800) 275-2273. When prompted, say “gift card” to speak to someone about a gift card scam.

Steam card scams: Go to Steam support, then choose “Purchases,” and “I have purchases from Steam that I didn’t make.”

OneVanilla prepaid card scams: Call VISA Vanilla Card customer service at 1-800-571-1376.

Two places you can check to see if you are involved in a potential scam are Internal Revenue Service (IRS) Consumer Alerts and The Federal Trade Commission.

Avoid Gift Card Fraud With KII Consulting

The need for financial wellness, privacy, and Cyber Wellness Protection benefits has never been greater. KII Consulting, Inc. works closely with clients as a trusted advisor and partner in customizing solutions that enhance engagement, retention, generate revenue, protection, and peace of mind.

For Cyber Wellness Protection and cybersecurity strategies and solutions, call KII Consulting, Inc. at 1-800-201-5563 or email [email protected].