Tips to spotting and avoiding gift card scammers

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QUINCY — As the holiday shopping season kicks off, so do holiday scams. Gift card scams are one of the most popular methods scammers used, and they’re becoming more common.

Fraud reports to BBB Scam Tracker involving gift cards as a form of payment spiked in the first three quarters of 2023, up 50 percent from the same period last year.

BBB recently released an update to a 2021 study that examines why scammers love gift cards as a method of stealing money from consumers, and how the recent spike in this kind of scam is causing retailers to take precautions against it.

There’s a good chance you’ve heard of some version of this scam before. Fraudsters persuade people to purchase and send them gift cards by impersonating online sellers, pet breeders, government officials, sweepstakes officials or others.

In most instances, scammers will ask people to buy gift cards and send them the bar code and PIN on the back. The BBB study update found that scammers are most likely to ask for gift cards from big box, technology and online stores.

So, why do scammers want gift cards as payment? Gift cards are essentially cash – anyone who has the code can spend the funds on the card. For that reason, online gift cards in particular are a convenient way for scammers to steal money.

Retailers are working on new tech solutions, like algorithms to detect fraud, that are helping them crack down on gift card scams. However, they’ve had to continually adapt as scammers evolve their methods.

Be on the lookout for gift card scams as we move into the holiday shopping season. As a rule of thumb, you should be wary if someone asks you to pay them with gift cards, especially if you’re purchasing something online.

BBB’s tips for spotting and avoiding gift card scams:

  • Be wary of anyone asking for payment with a gift card. This includes “government” agencies. No legitimate government organization will ask you to pay with a gift card.
  • Double check before you buy. If you suspect a scam, contact the gift card seller, the actual business or government organization supposedly asking for money, and BBB to ask if you are dealing with a scammer. To find contact information, go directly to the organization’s website rather than search for their customer service number, which can be spoofed by scammers.
  • Keep your receipts. Keep all information related to your purchase. If you are scammed, some retailers may require that information for refunds.
  • If you suspect fraud, act immediately. Contact the gift card seller or the number on the back of the card to report it.
  • Report fraud. You can report suspected scams to BBB Scam Tracker, the Federal Trade Commission and the Canadian Anti-Fraud Centre.

Don O’Brien is the regional director for the Quincy Better Business Bureau. Contact him at dobrien@quincybbb.org or 217-209-3972.

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