Gift cards are a great way to give a gift. However, did you know they could also be a fraudster’s favourite way to steal money? Gift card scams offer the promise of gift cards for websites or stores that don’t offer gift cards or only offer them through official channels. According to the Federal Trade Commission’s (FTC) recent data, more scammers are demanding payment with a gift card than ever before. It was also reported that 77.9 million in total dollars was lost, with gift cards or reloadable cards used as a payment method. These scams can also promise more in gift card value than you pay for the gift card itself.
Losses reported as regards scam nearly tripled between 2017 and 2020, with a median loss of $700 in 2020. It appears consumers over 65 were more likely to lose money than younger ones.
However, gift card scams aren’t novel, and they have been in existence since gift cards became very popular. In this article, we’ll look into the gift card scams by type and how to not fall victim to them.
Most Common Gift Card Scams To Avoid In 2021
1. Physical Store Gift Card Hacking
Physical or In-store Gift Card Hacking Criminals can go into any grocery store in with a gift card display and steal money. They simply pull a card (or many cards) off the display, discretely scratch off the covering, and replace it with a sticker they can purchase online after recording the code in their phone.
If you have ever been to a grocery store that has a gift card display rack, then you are aware that they feature famous retailers such as Target, Fandango, Amazon and The Cheesecake Factory? Even though they are gift items that come in handy as last-minute gifts, they are the first choice for hackers. And here’s why:
The numbers and codes are all that is required. A packaged gift card, in most cases are exposed, hence prone to hackers. Anyone can take a card off the rack, write down the numbers and peel off the film covering the PIN. Also, the protective film can easily be replaced or gotten anywhere, including online. It is almost never known until a consumer purchase it. There is a unique software that informs the hacker once a gift card has been activated.
This brings about the most important question, “how can I determine the probity of a gift card?” To be sure of the gift card you are purchasing, you should only buy at trusted stores, that are extra protective of gift cards.
2. IRS Phone Scam
Scammers carry out most of their fraudulent schemes via phone. They try to convince potential victims that they are trusted IRS employees by phishing caller ID information, using fake or even real IRS employee badge numbers, and having key information about their targets. According to a Federal Trade Commission (FTC) report, imposter scams cost Americans some $667 million in 2019—and those were just the cases reported to authorities. Spam callers may try to persuade their targets to send them immediate payment through a preloaded debit card, gift card, or wire transfer—which can be hard to trace.
To be on the safe side, note that the IRS will not do any of the under listed:
- Ask for instant payment or call without first mailing a bill.
- Ask for payment without the opportunity for the taxpayer to question the amount owed.
- Ask for your debit or credit card over the phone.
3. Gift Card Bots
In the report of the FTC about gift cards in 2017, it was detected that a sophisticated gift card bot attack affected over 1000 consumers websites around the world. Should you have tried checking your gift card balance of recent, you may have discovered that many retailers failed to provide the required information to you. This is because gift card payment processes on websites have been susceptible to bad bots trying to scam people of their money.
Ghostbots of gift cards have to do with card or token cracking. Simply put, hackers make use of automation to test a list of account numbers and request for their account balance. If they get access to the account balance, the bot operator becomes aware that the account numbers exists and has money in it.
To not fall victim, it’s pertinent to watch your gift card balance and takes screenshots a few times a month to be sure that there is no suspicious activity on your gift card.
How To Not Fall Victim of Gift Card Scams
The more gift card fraudsters become creative, the more the need for you to be watchful.
- Inspect gift card packaging.
- Keep the receipt every time you buy a gift card.
- If you suspect a call may be fraudulent, then it is fraudulent. Hence, do not entertain calls from suspected scammers.