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Gift cards are a popular item to give and receive, thanks to their ease of use and wide acceptance. Unfortunately, these conveniences also make them attractive to scammers.

Instances of gift card fraud continue to rise, which costs consumers millions each year. By understanding how gift card scams work, you will be able to protect yourself and your money.

Let’s talk about gift card fraud. Here, we’ll talk about what this scam is, how you may encounter it, and what you can do to keep yourself (and your loved ones) safe from it.

What Is Gift Card Fraud?

At its core, gift card fraud is the practice of stealing a gift card. In today’s digital-forward economy, thieves can take gift cards without even having to pilfer a wallet or handbag.

All scammers need to do is get a gift card’s number and PIN. Once they have this information, any funds on the card can disappear in a matter of minutes.

Unfortunately, gift card scams are much harder to reverse than debit or credit card fraud. The funds on these cards can be redeemed almost instantly, making any theft nearly impossible to trace or rectify.

Common Gift Card Fraud Scenarios

Gift card fraud can occur under many different circumstances. Much like any other form of fraud, they usually involve urgency, fear, or pressure.

Many gift card scams involve communicating through email, text messaging, and even phone calls. Common scenarios may include:

• Impersonation scams: A scammer pretends to be a trusted source, such as your employer, an authority figure, or even a family member, and claims immediate payment is required.
• Tech support scams: A pop-up, email, or phone call warns that your device or account has been compromised and instructs you to pay for “repairs” using gift cards.
• Prize or lottery scams: You’re told you’ve won a prize but must first pay fees or taxes using gift cards.
• Online marketplace scams: Fraudsters request gift cards as payment for items or services sold through social media or online listings.
• Romance or social engineering scams: A scammer builds trust over time and then asks for gift cards to help with an emergency or opportunity. 

What do all these scenarios have in common? In each of the instances above, the scammer will try to convince their victim that the only way to make a payment is through a gift card.

When you can spot this telltale warning sign, it is much easier to deduce that a scam is in progress, and you can respond accordingly.

Identifying Gift Card Fraud

Knowing the warning signs of a gift card scam can help you stop the problem before it causes any financial harm.

In most money-based transactions, gift cards are rarely the preferred payment method. If someone, whether it be an individual or business, insists that you use a gift card exclusively, then you should be on your guard.

Remember that scammers thrive when they can pressure, rush, or intimidate their targets. When confronted with any suspicious communication, stop and assess your situation. Be cautious if:

• You’re told to act immediately or keep the payment secret.
• Someone demands payment via gift cards, prepaid cards, or cryptocurrency.
• The request comes through unexpected phone calls, texts, emails, or social media messages.
• You’re asked to share gift card numbers, PINs, or photos of the cards.
• The message contains threats, such as arrest, account closure, or service shutoff.
  

Furthermore, legitimate businesses and government agencies will never ask for payment in gift cards. If something feels off, trust your instincts and pause before acting.

What To Do if You Spot or Suspect a Gift Card Scam

If you believe you’ve encountered a gift card scam, or may already be involved, take these steps right away:

Stop the transaction. Do not purchase gift cards or share any card details.

Contact the gift card issuer immediately. If you’ve already shared the card number or PIN, reach out to the card issuer right away. They may be able to freeze remaining funds if action is taken quickly.

Notify your credit union. Let your financial institution know about the situation, especially if the scam involved account access, transfers, or personal information.

Report the scam. File a report with the Federal Trade Commission (FTC) at reportfraud.ftc.gov. Reporting helps authorities track trends and protect others.

Warn others. Share your experience with friends and family so they can recognize similar scams.

The Federal Trade Commission has a primer on gift card scams and the steps you can take to prevent them. We recommend reading this article if you are interested in learning more about this type of fraud.

Stay One Step Ahead of Gift Card Scams

Gift card fraud relies on surprise, instilling a sense of urgency, and spreading misinformation. By staying informed and taking a moment to verify unexpected payment requests, you can significantly reduce your risk of falling for a scam.

Always remember the basics of scam prevention:

• Exercise healthy skepticism.
• Take your time to assess the situation.
• Verify the source before following any requests.
  

Awareness is your best defense. Taking a few extra minutes can save you from a costly mistake.

First Florida is your trusted partner when preventing gift card theft and misuse. For more information on how you can protect your personal information, visit our Scam and Fraud Education page.