Consumers reported losing a whopping $148 million in gift cards to scams

This year, Target gift cards are scammers’ top choice. Google Play, Apple, eBay, and Walmart cards remain popular with fraudsters, too.

During the first nine months of 2021, 40,000 people reported losing a whopping $148 million in gift cards to scammers. According to the Federal Trade Commission (FTC), these are staggering numbers that have increased each year for the past several years. Since 2018, gift cards have been the most frequently reported payment method for fraud.

According to the FTC, most gift card scams start with a phone call from someone impersonating a branch of the government like the Social Security Administration or a business.

“The caller might threaten to freeze your bank account and tell you that you must buy gift cards to avoid arrest or to keep access to your money in your bank account. They will tell you to stay on the phone as you head to the store to buy gift cards to, they often claim, solve the “problem” they are calling about. They will also ask you to provide the numbers on the back of the card you buy. These are all signs of a gift card scam,” FTC said.

If you find yourself heading to the store to buy gift cards because someone on the phone told you so, stop. No matter who calls, texts, or emails you telling you to pay with a gift card, it is always a scammer. The government and legitimate businesses will never call you demanding payment with a gift card.

You might even get an email from a scammer impersonating your boss, asking, for example, to pay for the upcoming office party with gift cards and promising to pay you back later. This is an example of the business email compromise (BEC), which, according to the FBI, caused $1,8 billion worth of damage in the US last year. Scammers are not only after your money. They might also try to get access to the company’s sensitive data.

Gift card scams are widespread, and you might easily get bilked if a gift card looks like an excellent last-minute holiday present for your loved ones. There’s a high demand for slightly cheaper gift cards, and many consumers buy them from shady channels. Typically, those gift cards have been previously used and can be empty.