If you’ve ever been targeted by a scam and gotten far enough into the grift, there’s a high chance that the scammers didn’t ask for money. Instead, they demanded “payment” in the form of gift cards. Why do scammers want gift cards? Simple: they’re hard to trace and essentially impossible to refund.
Of course, there’s more to it than that, so today we’ll go over all the details, including the most common gift card scams you should watch out for. Let’s get started!
Why Do Scammers Want Gift Cards?
We covered the simple answer — which is that gift cards are hard to track or cancel — but let’s break down all of the reasons gift cards have become scammers’ go-to form of currency.
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- Anonymous and difficult to trace: Whether it’s a prepaid Visa card or gift card for a company like Amazon, once the card has been given away, it’s all but impossible to tie it to the actual scammers. Unlike cash transfers that have to go to a bank account that generally requires some sort of identification process, gift cards are nameless. Even if you could somehow track the card’s use, you’ll be hard-pressed to prove it was the scammers who used it, especially since selling the cards for cash or crypto is fairly common.
- Wide availability and easy to purchase: Another reason gift cards are a popular scammer payout method is how easy it is to find and buy them. They are purchasable instantly online, and every grocery store, convenience store, and drug store will have a variety of gift cards and prepaid debit cards. This means scammers know their victims should have no issues finding and purchasing them.
- Easy to flip for value: While prepaid debit cards are essentially cash and can be used anywhere, brand-specific gift cards are still easy for scammers to sell on secondary markets for equal or slightly lesser value than the gift card amount.
- Can’t be disputed: Whereas money transfers can be reversed, once a gift card is purchased, there’s pretty much no way of cancelling it or getting a refund.
How Gift Card Scams Work
There are probably a hundred different ways scammers trick people into giving them gift cards, but here’s the general gist of how these scams play out:
- Scammers pose as a trusted source such as a boss, work colleague, recognized brand, bank, or even friends and family.
- They reach out with some “urgent” matter involving a made-up scenario that typically either claims you or someone you know is in trouble or needs immediate help.
- Scammers then instruct you to purchase a gift card (they often specify types, such as Amazon gift cards, Google Play gift cards, or prepaid Visa cards). This can be done either online or in a store.
- They will then either have you share the numbers and PINs off the back or have you send an e-gift card directly to a specified email address.
- They quickly redeem the funds and disappear.
What do Scammers Do with Gift Cards?
It’s fair to wonder what scammers even do with gift cards, after all, wouldn’t cash be better? While yes, cash is always the end goal, gift cards offer scammers a layer of protection (as we mentioned, hard to trace and impossible to refund). But how exactly do they turn gift cards into money? Well, there are a few different ways.
- They sell the gift cards for cash. One of the easiest ways to turn a gift card into cash is to simply sell it for money. This usually involves selling it for less than the face value, but it’s a small fee to pay in the grand scheme of things for the scammer.
- They buy expensive items and then sell them. If a scammer has convinced you to send over a few hundred dollars worth of gift cards for a site like Amazon, they will quickly purchase items like iPads, which they can then turn around and sell for cash.
- They launder the cards through fake apps or seller accounts. A slightly more complex way scammers launder gift cards into cash is via apps or seller accounts.
For platforms like the Google Play Store, they request gift cards for the platform and then use the cards to spend money on apps they have created to make it look like legitimate income.
For platforms like Amazon, they create seller accounts and then use the gift cards to purchase their own merchandise, once again turning gift cards into legitimate-looking income.
When it comes to turning gift cards into real cash, the above ways are the most common, but there are likely other methods as well. There are plenty of things you can say about scammers (all bad), but one thing they do seem to have is plenty of creativity when it comes to stealing money.
Common Gift Card Scams
Alright, so now you know why scammers like gift cards and what they do with them, but in order to really understand gift card scams, it’s important to look at the most common scenarios they use to trick their victims.
Compromised Bank Account Gift Card Scam
Starting with a gift card scam that aims for a big haul, scammers will call you, claiming to be from the fraud department, alerting you that your account has been compromised. They will then convince you that you need to immediately transfer your balance into prepaid gift cards, which can then be moved to a new, secure account.
They’ll say all you need to do is get as much money as you can on prepaid cards (i.e., Visa or Mastercard) and then give them the information on the card(s) to move into a new account. Of course, they actually just steal all of the money, leaving you high and dry.
Romance Scams
Romance scams are a whole topic in themselves (read all about them here), but they are a common setup for gift card scams. Whether it be a supposed love interest who wants to go on a shopping spree or needs help getting a gift for their family member, pretty much any scenario where a romantic partner you haven’t met asks for money or gift cards is most likely a scam. Sorry to say, but in this case, it’s better to break your heart than your bank account.
Gift Card Work Scams
Work-related scams are another area that has endless variation, but there’s a specific scenario tied directly to gift cards. Scammers will contact people, pretending to be their boss or a work associate. They will provide a story about how they need gift cards as part of a company event/giveaway, and ask that you purchase them (generally in the form of e-gift cards that can be sent directly to an email that they claim was set up for the event). They assure you that you’ll be reimbursed, but once again, because they aren’t who they say they are, they leave you with a hole in your account in the form of a few hundred bucks.
Compromised Physical Gift Cards
This scam is a bit different, since you often won’t even realize you’ve been scammed until you try to use a gift card you’ve purchased for your own personal use. Here, scammers will actually steal numbers and PINs from gift cards in stores, replace the silver security sticker, and then wait for the card to be activated.
As soon as they are alerted (they often set up a way to be notified), they use the funds on the gift card, unbeknownst to the gift card owner. The only way you’ll find out you’ve been scammed is once you go to use the gift card and the balance is $0, despite you never using it.
Specific tips to help avoid this type of scam are to see if the silver security cover appears to be tampered with (or has been replaced by a similar sticker) and to register your gift card as soon as possible (as instructed on the back of the card). Unfortunately, neither of these methods is foolproof, but they do at least give you a chance to keep yourself from being scammed.
Giveaway Gift Card Scams
While the name of this scam sounds like you’re getting a gift card (there is probably a scam out there that promises that), this scam is actually more similar to the Publishers Clearing House scam. Here, scammers convince you that you’ve won a grand prize giveaway, and all you have to do is provide a gift card to confirm yourself and collect your prize. In this case, not only have you been scammed out of giving away a gift card, but you also don’t actually win anything. An unfortunate lose-lose for you.
How to Stay Safe From Gift Card Scams
A reported $217 million was lost in gift card-related scams in 2023 (the most recently published data at the time of writing), proving that no matter how foolproof you think you are, these scams still find success. If you learn nothing else, the one takeaway you should have from this article is that there is no situation in which you should ever fulfill requests for gift cards, no matter how urgent the scenario (the one exception being gift cards you actually plan on directly giving friends or family members).
And that’s really it. Gift cards should only be used for one purpose: a gift. So long as you keep that in mind, and also pay attention to the common scams we laid out above, your odds of becoming a gift card scam victim should be much lower!
Scam Call or Real Deal?
Getting an urgent call can make even the most composed of us feel frantic, which is exactly when we’re most likely to make mistakes. Scammers know this and thrive on that fact. If you get a call that feels urgent and demands are being made of you, it’s most likely a scam.
But, if you want to be extra sure, Spokeo’s reverse phone lookup can help you identify if the number that’s calling you is the real deal or just another scammer trying to make you a victim.
Cyrus Grant is a writer from Southern California with a background in law and dispute resolution. When he isn’t writing, he can be found deep-diving into the latest technology trends or simply spending time at the beach.