Some criminals have sophisticated methods for stealing the funds loaded onto gift cards, and others trick people into sending gift cards as payment for goods or services that are never provided. By simply knowing the warning signs of gift card scams, you can reduce your risk.
It’s no surprise that gift cards are a popular gift option — they’re convenient and useful.
Unfortunately, gift cards are also a top payment method for fraud, according to the Federal Trade Commission (FTC).
Our own Vera Tolmachoff, Restoration Manager at Allstate Identity Protection, has seen how gift cards are an attractive way for fraudsters to get fast cash. This is in part because gift cards offer fewer consumer protections than other payment methods, like credit cards.
“With gift card scams, the transactions are more challenging to reverse, and once the funds are stolen, it can be difficult to trace the crime back to fraudsters,” says Tolmachoff.
How thieves hack gift cards
Have you ever given or received a gift card that actually had a balance of zero? When this happens, it could be due to cashier error — or criminal activity.
The Better Business Bureau (BBB) notes that a scammer doesn’t have to physically swipe a gift card to access the funds.
Criminals may steal money from gift cards by:
Tampering with gift cards displayed on store racks. They’ll expose the PIN on the back of the card and take a picture of it, along with the gift card number. Then, they find a way to cover the exposed PIN — by placing a sticker over it, for example — before putting the gift card back on the shelf. Once the card is purchased and activated, the scammer can access the funds.
Hacking into gift cards remotely. Criminals may use bots or other remote methods to guess the PINs and get access to the card’s funds.
Selling phony gift cards online. If you find a gift card selling for a suspiciously low price online, it’s likely fake or stolen.
Using fake websites to capture the gift card’s identifying number and PIN. They’ll prompt you to activate a gift card — or check its balance — on a fraudulent site, that’s not the one listed on the physical card or in the instructions that came with it.
Tips for safely giving and receiving gift cards
No matter their method, these scammers usually have one goal in mind: to drain the funds from your gift card and scam you out of your money. Our advice can help you make sure this doesn’t happen.
When purchasing a gift card, follow these safety tips:
Examine the card before you buy it. The PIN on the back should be covered, and the packaging or security seals shouldn’t be wrinkled, torn, or otherwise damaged.
Keep the receipt. This can be helpful if you have to report an issue later on. If you plan to give the gift card to a loved one, consider taping the receipt to the card.
On the flip side, if you receive a gift card, follow these tips:
Register the gift card promptly. And if the retailer allows it, change the PIN. This could help protect you in case the card is lost or stolen later on.
Use the gift card as soon as possible. If it was hacked, a scammer could beat you to using the funds.
Another twist to gift card scams
Scammers may also try to convince you into sending them a gift card as payment for goods or services that are never provided.
Or, they’ll find a way to convince you to share a gift card number, as well as its identifying number and PIN. Then, they’ll activate the gift card themselves and spend the balance.
Anytime someone asks you to send payment via a gift card, it’s safe to assume it’s a scam — especially if you spot one or more of these red flags:
Urgent requests: Someone contacts you with an “emergency” request — typically via phone call, email, text, or on social media. The scammer may pose as a representative from a government agency or as a tech support employee for a company.
Pressure tactics: They claim that if you don’t pay immediately, there will be consequences. The goal is to pressure you into acting quickly before you think through the situation or discuss it with anyone.
Demanding and specific instructions: A scammer might say that you need to buy a certain type of gift card — better known as an Amazon gift card scam, Apple gift card scam, or Target gift card scam. They also may direct you to purchase it online or at a specific store. If the scammer reaches out by phone, they may even urge you to keep them on the line as you go into the store and buy one or more gift cards. This is because they don’t want you to speak to anyone who might intervene.
What to do if you have been gift card scammed
If you suspect you’re talking to a scammer, remember: you’re in control. You can simply hang up or delete the message.
Not sure if something’s a scam? Give us a call if you’re an Allstate Identity Protection Member. Our identity specialists can help you determine if something’s likely fraud, and we’re here for our members 24/7 — even on holidays.
