How to spot scams fraudsters use to steal your money and personal information using gift cards
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Gift cards are a very popular and convenient way to give a gift this holiday season to your friends or family, but they can also be a target for scammers who want to steal your money or personal information.
According to the Better Business Bureau (BBB) 50% more people reported gift card fraud this year compared to last year.
So, what are the sneaky tricks scammers and hackers are using to deceive you? How do you spot their awful tricks and avoid them? Here are the five most common gift card scams aimed at you this time of year.
1. Display rack gift card trick
Fake scratch-off label placed on top of already scratched-off label (Kurt "CyberGuy" Knutsson)
One of the latest gift card tricks involves tampering with the gift cards on the display racks at retail stores. Scammers will record the activation code on the card or place a custom bar code sticker over the real bar code, which allows them to secretly load the cash onto their own card immediately after you purchase the gift card. This means that when you or your recipient try to use the gift card, it will be empty or invalid.
How to avoid this scam
Check the packaging of the gift card before buying it. Look for signs of tampering, such as the wrapping being torn or resealed, or stickers placed over the bar code or card number. Also, choose a card from the back of the rack, as scammers often place their fraudulent cards at the front of the display.
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2. Impersonation gift card trick
Person handing over a gift card (Kurt "CyberGuy" Knutsson)
Another common gift card trick scammers use involves impersonating someone you know or trust, such as a family member, a romantic interest, a company or the government. Scammers will contact you by phone, text, email or social media and create a fake story or emergency that requires you to send them money urgently.
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They will ask you to buy a gift card or multiple gift cards and then send them a photo of the card or the numbers on the back of the card. Once they have the gift card information, they will disappear with your money and cut off contact.
How to avoid this scam
Never send money or gift cards to anyone you don’t know personally or haven’t met in person. If someone claims to be someone you know or trust, verify their identity by contacting them directly through a different channel.
Don’t trust caller ID, as scammers can spoof phone numbers. Don’t be pressured by threats or promises, as scammers use emotional manipulation to get you to act quickly and without thinking. And remember, no legitimate company or government agency will ever ask you to pay them with a gift card.
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3. Resale gift card trick
Man with a gift card on top of a gift box (Kurt "CyberGuy" Knutsson)
Another gift card trick involves buying or selling gift cards on online platforms, such as websites, apps or social media groups. Scammers will offer to sell you gift cards at a discounted price or buy your unwanted gift cards for cash.
However, they will either send you a fake or empty gift card or take your gift card information and money without sending you anything in return. They may also use stolen credit cards or hacked accounts to buy or sell gift cards, which can put you at risk of fraud or identity theft.
How to avoid this scam
Only buy or sell gift cards from reputable sources, such as official retailers, authorized resellers or trusted friends and family. Avoid buying or selling gift cards from strangers online, especially if they offer a deal that sounds too good to be true.
Don’t share your gift card information or personal details with anyone you don’t know or trust. And use a secure payment method that offers protection, such as a credit card or PayPal, instead of a gift card, wire transfer or cash.
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4. Phishing gift card trick
A man using a gift card (Kurt "CyberGuy" Knutsson)
A very popular gift card trick this holiday season involves phishing, which is a type of online fraud that tries to trick you into revealing your personal or financial information. Scammers will send you an email, text or pop-up message that looks like it comes from a legitimate company, such as a retailer, a bank or a tech support service.
They will claim that there is a problem with your account, your order, your device or your security and that you need to verify your identity, update your information or fix an issue. They will then ask you to click on a link, open an attachment or call a number and then request that you pay them with a gift card or provide them with your gift card information.
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How to avoid this scam
Never click on links, open attachments or call numbers from unsolicited messages, as they may lead to fake or malicious websites or software. Don’t provide any personal or financial information, such as your passwords, PINs, account numbers or gift card numbers to anyone who contacts you unexpectedly.
Don’t trust messages that create a sense of urgency, pressure or fear. They are designed to make you act without thinking. If you have any doubts about the legitimacy of a message, contact the company directly using a verified website, phone number or email address.
Using antivirus protection will help to protect you against scammers and hackers who try to steal your money and personal information using gift cards tricks, especially through through phishing.
The best way to protect yourself from clicking on any malicious links, fake websites and phishing emails and text messages is to have antivirus protection installed and actively running on all your devices. It’s the best way to stop and alert you of any malware in your system and ultimately protect you from being hacked.
See my expert review of the best antivirus protection for your Windows, Mac, Android & iOS devices.
5. Loyalty program gift card trick
A man receives fake loyalty programs offer (Kurt "CyberGuy" Knutsson )
This gift card trick involves loyalty programs, which are rewards programs that offer you points, discounts or freebies for being a loyal customer. Scammers will pretend to be representatives of a loyalty program that you are a member of or that you are eligible to join.
They will tell you that you have won a prize, a sweepstakes or a promotion and that you need to pay a fee, a tax or a shipping cost to claim it. They will then ask you to pay them with a gift card or provide them with your gift card information.
How to avoid this scam
Be wary of any unsolicited offers or notifications that claim that you have won something, especially if you don’t remember entering or signing up for anything. Don’t pay any money or fees to receive a prize, as legitimate loyalty programs will never ask you to do that. Don’t provide any personal or financial information, such as your passwords, account numbers or gift card numbers to anyone who contacts you unexpectedly.
Don’t trust messages that create a sense of excitement, curiosity or greed, as they are designed to make you act impulsively. If you have any doubts about the legitimacy of a message, contact the loyalty program directly using a verified website, phone number or email address.
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How to safely give and receive gift cards
- Buy gift cards online instead or physical cards directly from the store, not third parties. You can also use these favorite sites and apps that will reward you with money back on all gift card purchases.
- Avoid gift card racks at retail stores like the grocery store. If you still want to buy one at the store, dig back into the pile without taking the first ones off the rack. Inspect them like a detective before you buy to make sure they are unaltered.
- Register the gift card directly with the retailer if offered, which also helps track card balance.
- Never engage in any gift card transactions from callers making unusual claims. It is likely a scam.
- Avoid buying gift cards from online auction sites like eBay.
- Never provide personal financial information beyond a method of payment to anyone offering gift cards in-store or online.
- Use antivirus protection. An effective antivirus software is a must-have to protect against scammers and hackers who try to steal your money and personal information using gift card tricks, especially through phishing. The best way to protect yourself from clicking on any malicious links, fake websites and phishing emails and text messages is to have antivirus protection installed and actively running on all your devices. It’s the best to help stop and alert you of any malware in your system and ultimately protect you from being hacked.
I've been scammed! What to do next?
Below are some next steps if you find you or your loved one is a victim of identity theft as a result of a gift card trick by scammers or hackers.
1) If you can regain control of your accounts, change your passwords and inform the account provider
2) Look through bank statements and checking account transactions to see where outlier activity started
3) Use an Identity Theft protection service: Identity Theft companies can monitor personal information like your Social Security Number, phone number and email address and alert you if it is being sold on the dark web or being used to open an account. They can also assist you in freezing your bank and credit card accounts to prevent further unauthorized use by criminals. See my review for Best identity theft protection services 2023 here.
4) Report any breaches to official government agencies like the Federal Trade Commission (FTC) and the gift card company.
5) Get the professional advice of a lawyer before speaking to law enforcement, especially when you are dealing with criminal identity theft and if being a victim of criminal identity theft leaves you unable to secure employment or housing.
6) Alert all three major credit bureaus and possibly place a fraud alert on your credit report.
7) Run your own background check or request a copy of one if that is how you discovered your information has been used by a criminal.
If you are a victim of identity theft because of a gift card scam, the most important thing to do is to take immediate action to mitigate the damage and prevent further harm.
Kurt's key takeaways
Gift card scams are a serious and growing problem that can cause you to lose money, personal information or both. However, you can protect yourself and your loved ones by being aware of the common types of gift card scams we outlined and by following the simple tips to spot them and avoid them.
Have you ever fallen victim to a gift card scam? If so, how did it happen, and what did you do? Let us know by writing us at Cyberguy.com/Contact
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Kurt "CyberGuy" Knutsson is an award-winning tech journalist who has a deep love of technology, gear and gadgets that make life better with his contributions for Fox News & FOX Business beginning mornings on "FOX & Friends." Got a tech question? Get Kurt’s CyberGuy Newsletter, share your voice, a story idea or comment at CyberGuy.com.
