The number of gift card scams and the money lost to these scams has increased every year since 2018. Fraudsters like gift cards because they are easy to purchase, easy to share and impossible to trace.
Many gift card scams start with outreach by someone impersonating a branch of the government like the Social Security Administration or a government-adjacent business like the Internal Revenue Service (IRS.) The scammer may threaten to freeze bank accounts or even issue a warrant for arrest if gift cards aren’t used to pay off an unpaid balance or clear some other ‘problem.’ Others impersonate colleagues (often claiming to be a senior leader from your workplace), asking for gift cards as payment to clients or friends/family asking for gift card funds to get them out of some sort of emergency.
Regardless of the reason for payment, the scam follows a certain formula: You receive a text, email, or phone call instilling urgency to make a payment by purchasing cards from the nearest retailer. After the cards have been purchased, you’re asked to pay by sharing the code(s) on the back of the card. Google Pay, Apple, eBay, Target, and Walmart cards remain popular requests among scammers. Read other examples of similar scams on the Federal Trade Commission’s (FTC) Gift Card Scams page.
It's important to know that gift cards can be used only to purchase goods and services from the issuing retailer. If you're approached to use the cards for any other payment, you could very likely be the target of a scam and should immediately report it to your local police department as well as the FTC’s reporting site.
Remember to also be diligent with holiday giving to organizations. Have a look back at the December 2021 Information Security Brief for reminders and resources to prevent scammers from taking your charitable donations for their own profit.
It’s also the time of year for package delivery scams. If you missed the November newsletter, read up on this trend here.