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The Art of the Steal: Gift Card Scams, Purchase, and Protection

gift card scamsReading Time: 3 minutes

A popular shopping and gift-giving product is the gift card, particularly during holiday seasons. Unfortunately, with such thoughtful gifts comes the opportunity for gift card scams. We take a closer look at this frustrating scam and help you learn to spot and avoid them.

Gift Cards – An Overview

Gift cards are offered in most brick and mortar retailers and online. Consumers can purchase them from Visa, AmEx, Target, the Apple Store, as well as their local supermarkets. This is a consumer purchasing tool designed to offer convenience to the buyer and purchase choice to the end user. Gift cards work as a payment tool similar to a credit or debit card, although gift cards are pre-paid with a set value added. They are generally offered in increments of $5.00 – $500.00 and used for purchases in whole or in part. Gift cards also come with branding and marketing incentives such as rewards and special offers. Gift cards are commonly referred to as a stored-value product since the cash value is stored onto the card. Some are coded for one-time use, while others can be value-added (or re-loaded) by the end user.

Caveat Emptor – Let the Buyer Beware

As with any product, consumers should be mindful when making gift card purchases. Generally, it is best to purchase from reputable retailers or those you shop regularly. It is not recommended to purchase gift cards through third-parties or to accept them as payment for goods or services. There is no protection built-in to a gift card under such circumstances. Gift cards have the same face value as cash and can sometimes be used fraudulently. From 2017, listen to the FBI podcast repository on the issue of gift card fraud. The highest occurrences of scams occur during the holiday shopping season. If you think you may be a victim of gift card scam, notify the FBI Internet Crime Complaint Center.

There are some news stories about skimming and gift card scams on the internet. Take time to consider the media source and crosscheck other news outlets in your area. There is a difference between being anxious or a conscientious consumer. It is rare that a lone scammer can alter a card in-store, unnoticed, without a purchase. Although these can occur between friends or family members of a retail associate who has access to gift cards, scanner, and the Point of Sale (POS) system. The first rule of thumb is to never purchase a gift card in person that has been scratched (where the security code is exposed) or shows signs of tampering. Also purchase them at the counter, not from a display rack or kiosk.

The Digital Age

Since the 2010s, classic gift cards have evolved into eGift Cards from various retailers. The buyer can select a design, add a personalized message, and purchase a desired amount. Once you make an eGift Card purchase you receive a notification that the end user has received the eGift Card or used it. Another useful resource is the AARP Fraud Watch Network. During the holiday season, Black Friday is usually followed by Cyber Monday, the first Monday after Thanksgiving when there is a peak in online shopping. Read Cyber Monday Shopping Tips to learn more about protecting your identity and purchases online.

A Gift Card Purchase and Protection Checklist

Below are some useful tips when purchasing your next gift card:

  • Do not purchase a gift card that has been scratched or tampered with in any way (including from a retailer).
  • Purchase gift cards only from reputable direct retailers, in-person or online, or those you frequently shop at.
  • Purchase gift cards with a credit card rather than a debit card or cash, since most credit cards come with built-in fraud protection.
  • Avoid purchasing gift cards from corner stores, gas stations, or truck stop areas.
  • Do not purchase, resell, or list your gift card on a social media marketplace. Your data or payment information could be compromised.
  • Save an email confirmation, make a note of the gift card number, card issuer Customer Support number and your receipt. This information can be useful if you do suspect fraudulent use.
  • Research aggregate websites for gift cards and eGift Card special offers. The Gift Card Lab (Blackhawk Network, Inc.) is a good starting point.

Gift cards and eGift Cards can be a convenient and flexible gift-giving and purchasing tool. They can be used to complete a purchase in part or whole. For any consumer, doing a bit of homework goes a long way in finding the right gift card product for your needs, whether for business or personal use. With a bit of diligence, purchasing gift cards online can be convenient and hassle-free. To learn more about gift card scam practices and online shopping protection, read Beat Down Online Shopping Scams from the Anti Fraud News blog.