Written by: Mrudul

Gift card scams and what you need to know about them

The holiday season is a great time to be a scammer. Unfortunately, a lot of honest consumers are swindled by scammers who rob them of their personal information and money. We would go so far as to say that everything you buy during the holiday season, right from electronics to gift cards, make sure you.

The holiday season is a great time to be a scammer

Unfortunately, a lot of honest consumers are swindled by scammers who rob them of their personal information and money. We would go so far as to say that everything you buy during the holiday season, right from electronics to gift cards, make sure you keep an observant eye.

No one wants to be scammed, especially during the holiday season, as it is a different kind of a bummer. More often than not, fraudsters are a step ahead of the law enforcement agencies. The onus is on you as a customer to make sure that you get what you buy.

An AARP survey said that 20% of the people who surveyed found that it had zero value in it. That’s a huge number and no one wants to be a part of this 20%. In this article, we will discuss how exactly you can identify gift card scammers.

Despite the many security measures in place, gift cards are still a source of scams. Here are the common types of gift card scams that you should be aware of:

Scam 1: The bots

Software applications that perform automated tasks are called bots. They are trained to drain the money off gift cards. Bots search for retailers’ online gift card balance check systems. It looks for gift cards that have been activated. When the bot eventually finds a card, the fraudsters use the gift card number to make purchases for themselves or sell the details on the dark web.

When unsuspecting customers use their gift cards, they will find that their balance has been completely dried. When you receive a gift card, use it immediately, thereby, you don’t give them time to find your information. The National Use Your Gift Card day is a reminder for you to do just that- use your gift card.

Scam 2: Auction Scam

If you are like most people, you might have had the temptation to buy gift cards from auction sites. This is also a place where fraudsters frequent, where they sell you gift cards that haven’t been activated. Most people frequent auction sites to buy gift cards believing that they are paying lesser than the card’s value. They eventually find that the card doesn’t work, and that’s sad.

The only way to avoid this scam is to never buy gift cards from an online auction site. Buy them directly from the retailer, the chances of getting scammed is pretty high on an auction site, especially if you are buying a gift card.

Scam 3: Scam calls from companies

Someone claiming to be an employee of a huge company like Amazon or Walmart will call you. They will tell you that you were behind on your bills and the only way to pay is with a gift card that the person tells you to buy. As soon as you buy the gift card, they will use your gift card information to shop for themselves.

Do remember that no one from a company will call and ask you to pay through gift cards. Your spidey senses should start tingling when you feel something is out of the ordinary, especially in a situation such as this.

Scam 4: Fake Prize

“You’ve won a lottery!”

This is probably one of the nicest things one will ever hear. Sadly, this could also be the beginning of a scam. If you get a call, email or an SMS from someone, it is most likely a scammer. They might tell you that the prize for the winners is a trip, a car, or even monetary rewards. But there’s a catch. Well, there’s always a catch, isn’t it?

To be able to claim the prize, the fraudster will ask you to pay a small fee to claim the prize, using a gift card. The fraudster will ask you to purchase a specific gift card and ask you to read the information aloud.

By now, you know that this is the modus operandi of a scammer. No legitimate lottery or business will ask you to pay a fee upfront to claim the prize. Also, you will never win a lottery or get a cash prize for a contest that you didn’t participate in at all.

Scam 5: Number stealer

Scamsters walk into stores such as Walmart or Tesco and read the numbers stored in the magnetic stripe on gift cards using a magstripe reader. They end up storing a number of gift card information and put back the cards where they were.

They will then use the customer support system and enter the copied gift card numbers. By doing this, they will get to know if someone has purchased the card, whether it has been activated, and how much balance is there on it. They will then use the gift card number to make purchases and leave the customer’s card dry.

Scam 6: The cashier

Sometimes, the cashier at the store might be the culprit. Let’s say you purchase a card from a department store. The cashier might activate the card, but replace it with a different card. The cashier can then use the activated card to make purchases while the customer will be left fuming because the one they purchased doesn’t work. The only way to escape from this scam is to be careful when the cashier is handing over the card to you.

Scam 7: Calls from a charity or a clergy

Most of the charities happen during the month of December, and it is a great time for the lurking fraudsters to show up. You will also find fraudsters posing as clergy members who will tell you that they are raising money for a church-related activity. They will send email, text or phone you and ask you to buy gift cards and share their numbers. Once they use your gift card number, you are never getting your money back.

What to do if you’ve been scammed?

If you have fallen victim to a gift card scam, then do not delete their messages. Make sure you keep the receipt as it has identifying information of the gift card. Here’s what you should do.

  • Reach out to the retailer who issued the gift card.
  • File a police report, it can actually help you get assistance from the gift card retailer
  • Provide detailed information to the FTC about the fraud. Include dates, names, screenshots of messages, email addresses, etc. While the FTC may not able to resolve your case, they will surely share the fraud reports with the local law enforcement agency.
  • Report the fraud to your state attorney general.

Doing the above steps will help the next person from not being defrauded of their money.

Customers who filed complaints to the FTC about gift card payment scams in the first 9 months of this year, lost $148 million, and it was more than what was stolen in the entire year of 2020.

You might even get a call from someone posing as an FBI or an IRS officer. As we mentioned earlier, genuine businesses or government bodies will never ask you for payment via gift cards.


It is better to be safe than sorry. While gift card companies will spend more resources on identifying ways to keep scammers at bay, as a consumer, you will still have to be cautious. If you feel someone is scamming you, hang up on the caller and block them from contacting you again.

If you are looking to set up a gift card solution for your business, get in touch with us to understand how the team at 99minds can help you.