Gift cards have gained immense popularity in recent years as more and more businesses are introducing them to attract consumers. But gift card scams are also on the rise as criminals find new ways to scam people out of money.
The very same reasons that make gift cards so popular among customers and retailers make them appealing to scammers and cybercriminals. Gift cards are like digital cash in that they are convenient to use, but being a semi-anonymous and difficult to trace payment method makes them an easy target for scammers. Although the scammers cannot rob someone out of their whole back account, they can definitely get a considerable amount of money from gift card scams.
Gift cards might serve the purpose of a debit or credit card, but they are not bound by the same industry standards and security for activation, tracking, and usage. That provides opportunities for scammers to create fake gift card schemes that are not traceable. Scammers can gather card numbers or PINs to steal gift card funds; they can even tamper with the cards in stores or use online techniques to drain balances.
Research has found gift card scams are particularly common during the holiday or shopping season, so make sure you are extra cautious during these times.
How to avoid gift card scams?
Gift cards are simply prepaid cards that can be used for a variety of purchases. The key feature is that it can be used for both online and in-person transactions. But organized criminals exploit gift cards in several ways ranging from simple frauds to hacking retailers’ gift card databases.
The best strategy to protect yourself and others from gift card scams is to be informed and exercise caution. The following are some tips to avoid gift card scams.
Verify – Some scammers will use phony telephone calls and emails to request payment via gift cards. But in the real world, reputable companies will never request payments this way. You can verify the call or email by contacting the original company or institution, but do not use the contact details provided by the scammer.
Buy from trusted sources - Purchase gift cards from reputable sellers or from the businesses where the card will be used. Nowadays, all authentic sellers offer money-back guarantees for gift cards. Their customer service also helps you deal with gift card scam issues.
Tampered packaging of gift cards – Inspect the gift card before buying; damaged or tampered packaging often indicates in-store scams. Make sure the protective stickers have not been removed. Check that the codes on the back of the card have not been modified or scratched off to reveal the PIN. Report any defective cards to the store immediately and cancel the purchase. Only buy the gift cards in well-sealed packaging.
Activation receipt - Check the gift card's activation receipt to verify the numbers. Make sure the number on the receipt and card match so that you are not wasting your money on an inactive card. This will protect you from any technical errors or scams by the retailer or employees. This activation receipt also serves as ownership proof if you are victim to any scams in the future. So make sure to keep this receipt in a safe place.
Security pin - When you receive a gift card as a present (or buy it), change the security code or pin as soon as possible. Try using the card as early as possible, because leaving the card unused for a long time can increase the chances of cybercrimes/scams.
Reselling gift cards - Sell gift cards to a legitimate gift card reseller that provides a money-back guarantee or take the unused card to a gift card exchange kiosk.
Review the terms and conditions - Knowing the policies is important for any transaction, including gift cards. Check if there are activation or usage fees. Is the fee charged one time or on every transaction? Also, make sure you know the expiry date(if any). Check whether there are any other additional hidden charges.
Online gift cards - Buying online is considered safer because there are fewer chances of tampering or card damage. The pins and numbers on in-store cards are easily accessible whereas online, they are visible to the buyer only. Balance check request - When reselling your card, the other person might request to listen to a call while checking the balance. Decline this request because the scammer will gather information to steal your funds during this call.
What to do if you are a victim of a gift card scam?
If you have been a victim of any gift card scam, contact the original seller or local authorities. Contact the gift card company and inform them that their gift card was used in a scam. They might track and stop the transaction, and if the money is still unused, you can even request for a refund. You can easily reach and report gift card scams to reputable companies like Amazon, eBay, Itunes, Google Play, etc. Reporting such crimes is equally important to prevent these scams.