4 Holiday Gift Card Scams and How To Avoid Them

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According to a recent survey from the Blackhawk Network, 84% of respondents had planned on purchasing a gift card for the holidays. The data also found that 72% of American consumers were aware of gift card fraud as of this July.

The four different types of gift card fraud situations in the survey were:

• The gift card wasn’t fully usable because the balance was significantly less than what was indicated (31%).
• The gift card wasn’t usable because it had a zero balance, even though it hadn’t been redeemed yet (55%).
• The gift card was counterfeit or fake (18%).
• They couldn’t remember the issue (5%).

This article will review the different gift card scams and how to avoid them.

Scam #1: The Gift Card Wasn’t Fully Usable

“Gift card tampering is when criminals manipulate gift cards or the packaging to steal important information before the card is sold,” said Kim Sobasky, a gift card industry expert and spokesperson for the Retail Gift Card Association (RGCA).

“They proceed to place the tampered cards back on store shelves. Once a consumer purchases the gift card, the criminal detects the activation through various illicit methods and quickly redeems it.”

A common gift card scam involves a card that isn’t fully usable because the balance isn’t what was indicated, the balance is zero or the entire card is counterfeit.

This scam can be more common over the holidays because consumers rush to buy gifts, and recipients may not have the time to immediately verify the balance. 

How can you avoid this gift card scam?

Sobasky shared that you should look for any exposed nicks or manipulation along any perforated areas used to access the gift card. This evidence can prove that the package was cut with a knife.

You can also test out the packaging with a slight bend back and forth. You want to do your best to receive the gift card’s package to ensure it doesn’t look like it was tampered in any way.

Scam #2: Scammers Claim To Be a Government Authority 

According to the FTC, scammers will pretend to be from the government (IRS, the Social Security Administration or the FTC) and contact you to pay a fine. The scammer will claim that you must pay taxes or some sort of fine immediately with a gift card as the form of payment.

Sobasky elaborated on how this gift scam happens: “You receive unexpected bad news, maybe from someone stating they’re with a government agency, your bank or local law enforcement, and they demand payment in the form of gift cards.”

How can you avoid this gift card scam?

Sobasky shared that any reputable organization where you legitimately owe money will not ask for a gift card as a form of payment.

You want to be extremely cautious of anyone claiming to be an official government contact asking for a gift card.

Scam #3: Romance Gift Card Scam 

This gift card scam has many variations, but someone will pretend to be romantically interested in you through social media or a dating platform. They’ll eventually ask you for a gift card as a means of payment to prove your affection or to arrange a meetup.

According to FTC data, reported losses for romance scams totaled $1.14 billion in 2023, with a median loss of $2,000 per person.

While we can’t attribute all of the losses to gift cards, scammers will often ask for one as a payment.

How can you avoid this gift card scam?

The FTC suggests you don’t send money to someone you haven’t met in person yet. Your best bet is to avoid sending a gift card or any kind of payment to a stranger you haven’t come in contact with in person. 

Scam #4: Fake Tech Support

“You get a call saying your computer has a virus, and they tell you to buy gift cards to pay for their services,” shared Alfred Polizzotto, the managing attorney at Polizzotto & Polizzotto, LLC.

The fake tech support scam usually involves receiving unsolicited communication from someone pretending to be helping you fix your computer. They’ll resolve an issue that didn’t exist in the first place and then request compensation as a gift card. 

How can you avoid this gift card scam?

Polizzotto pointed out that you should always hang up and verify with the company directly if you encounter this. You don’t want to get stuck on a phone call with a scammer and give them more time to try to swindle you.

Additional Tips for Protecting Yourself from Gift Card Scams

If you feel that you might be involved in a gift card scam, the best course of action is to inform the FTC at ReportFraud.ftc.gov. You can also contact gift card companies directly to report any concerns.

“The best thing you can do to avoid scams of any sort really is to look at everything with a healthy dose of skepticism,” noted Polizzotto.

“Always ask for time so you can take a breath and think about it. If a company is legitimate, they’re going to give you time to think — not badger you and keep you on the line to keep you from thinking clearly.”

You want to take some time to reflect on the situation because your utility company or the tech support from your bank wouldn’t contact you to request a gift card from Amazon or Apple to handle a minor issue. 

Sobasky concluded, “If you’re feeling anxious or rushed for information, especially in cases where payment in the form of gift cards is demanded, then it’s likely a scam.”

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