Tis the season for gift card…fraud? Yes, fraud. Gift card fraud is a popular & growing way for scammers to steal money from you.

Someone might ask you to pay for something using a gift card, like a Google Play or iTunes card, (any gift card quite frankly) and then ask you to give them the numbers on the back of the card. If someone ask you to do this, they’re trying to scam you. No real business or government agency will ever ask you to pay them with a gift card. Anyone who demands to be paid with a gift card is a scammer., and here’s how it works.

First, Why Gift Cards:

It’s simple, because gift cards are easy for people to find and buy, and they have fewer protections for buyers compared to some payment options. Gift cards are more like cash: once you use the card, the money on it is gone. Compared to credit card fraud, gift cards seem like a relatively small amount of money that’s being stolen from you. But, if you add up the large number of victims that fall for this scam that money adds up quickly and can be very profitable for thieves.

Plus, the scam is easy to pull off, once they get the gift card number and the PIN, they have your money.

Here’s How It Works:

Scammers call or even email their target – of course it’s an “urgent” matter and they need the person to help them right away. Then they will ask the person to purchase a gift card; they will usually be specific and ask for cards from a specific store – often Walmart, Target, CVS or Walgreens. They may even ask for cards from eBay, Google Play, Target, iTunes, etc. Sometimes they may request cards from several stores so cashiers won’t get suspicious. The caller may even try to stay on the phone with the person while they go to the store and load money onto the card. Then, the caller will ask the victim for the gift card number and the PIN. Once they have those two numbers the scammer has access and takes the money that was loaded onto the card(s).

How the scam works:

Scammers place a call or even send an email to their target victim with urgent news or a convincing story. They then ask, the person to send them a gift card, like an iTunes or Google Play card. The scam is usually performed under some sort of veil and will sound sincere. For example, the fraudster might contact you and claim to be the IRS, tech support, family members or even your boss.

Scammers may tell you many stories to get you to pay them with gift cards, here’s an example of what a scam request might look like:

From: Tommy Turner <urgent.message@totallylegit.com>
Sent: Thursday, December 9, 2021 9:46 AM
To: Buddy Green <bgreen10@victim.com>
Subject: Need Your Help

Buddy help me out. I need you to buy some gift cards at the store today. Once you get them picked up, send me the codes on the back or take a pics of the card code and send it to me here. I will reimburse you, I need these ASAP.

Sent from my iPad

The victim may feel pressure to quickly act on the transaction if they appear to be from someone they know or a legitimate email address. If you’re ever in this situation, make sure to question the sender about an urgent request! If you’re not comfortable questioning someone, then you’re much more likely to fall victim to this sort of scam.

What to Do if It Happens To You:

If you paid a scammer with a gift card, tell the company that issued the card right away. Tell them the gift card was used in a scam and ask if they can refund your money. If you act quickly enough, you might be able to get your money back. Click here for contact information to popular gift card companies. Gift Card Scams | FTC Consumer Information

Send and Share Gift Cards Safely:

Gift cards are for gifts, not for payments. Here are some tips from the Federal Trade Commission if you choose to buy gift cards to give away or donate:

Stick to stores you know and trust. Avoid buying from online auction sites because the cards may be fake or stolen.
Check it out before you buy it. Make sure the protective stickers are on the card and that they do not appear to have been tampered with. Also check that the PIN number on the back isn’t showing. Get a different card if you spot a problem.
Keep your receipt. This, or the card’s ID number, will help you file a report if you lose the gift card.
Use the card as soon as you can. It’s not unusual to misplace gift cards or forget you have them. Using them early will help you get the full value.
Treat gift cards like cash. If your card is lost or stolen, report it to the card’s issuer immediately. You might not get back the money left on the card – or you might get some, perhaps for a fee. You might need to show the receipt and the ID number on the card. Most issuers have toll-free telephone numbers you can call to report a lost or stolen card – find it on the card or online.

How to Report Fraud

If someone asks you to pay them with gift cards report it to the Federal Trade Commission at ReportFraud.ftc.gov. Report it even if you didn’t fall for the scam. Your report helps law enforcement stop scams.

You can also report it to your state attorney general.
If you lost money, also report it to local law enforcement. A police report may help when you deal with the card issuer.

If someone ever asks you to purchase a gift card, always remember that gift cards are for gifts, not payments. You have two options: 1. don’t engage with the requester, 2. If it appears to be coming from somebody you know, pick up the phone and ask them about it.

Source: https://www.consumer.ftc.gov/articles/paying-scammers-gift-cards