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How to Recognize & Protect Yourself Against Gift Card Scams

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A recent press release from the Federal Trade Commission (FTC) reports that gift card scams are on the rise. In the first nine months of 2021, almost 40,000 Americans have reported falling for a gift card scam, with losses totaling $148 million. This is more than all of 2020 combined.

What is a Gift Card Scam?

Gift card scams have become the favorite method of collecting payment by scammers because they’re easy to obtain, but nearly impossible to track and reverse once the damage is done. Here’s how they work:

  1. A scammer will call or email a target pretending to be a government agency, bill collector, or tech support for a large company. Some scammers will even try to impersonate the target’s boss or relative.
  2. The scammer will tell the victim that they must send an amount of money right away to avoid dire consequences. For example, a scammer pretending to be the IRS will demand a payment or they will freeze your bank accounts. Or someone posing as a utility company will threaten to shut off your electricity unless payment is made immediately.
  3. The scammer will then direct the victim to make the payment using gift cards. They will usually specify where to buy the gift card, like Target or iTunes. They will then ask the victim to provide the gift card number and PIN, either by reading the numbers off the card or by sending a photo of the card.
  4. Once the scammer has the gift card number and PIN, they can take the money and run. Since gift cards are harder to track than other methods of payment, they are almost as good as cash. This is why scammers like them so much.

How to Spot a Gift Card Scam

Spotting a gift card scam is simple: If someone demands payment via gift card, it is a scam. Period; end of sentence.

Other signs that someone is attempting to scam you are urgency and threats that something bad will happen if payment isn’t sent. But again, the request for gift cards is the biggest red flag. A legitimate business or government agency will never ask for payment using gift cards. As the FTC states, “Gift cards are for gifts, not for payments.”

What to Do If You Fall Victim to a Gift Card Scam

While gift card scams are easy to spot, people are still falling victim more than ever. Scammers can be very adept at convincing someone that they must send money, even against their better judgment. And unfortunately, scammers tend to target older people who may not be as savvy. This is why gift scams are becoming more popular and people are losing money in record amounts.

If you or a loved one falls victim to a gift card scam:

  1. Contact the company that issues the gift card ASAP. The FTC provides contact info for popular gift card companies on their website.
  2. Report the fraud to the FTC at You should do this even if you didn’t pay.
  3. File a police report, which will help you get assistance from the card issuer.

Gift Card Scam Stats

Gift Card Scam Stats

Bones Ijeoma

Author since Mar 03, 2023
Bones Ijeoma is CEO and co-founder of AllSafe IT, and his mission is to make downtime obsolete. Bones received a BS in Computer Engineering from Cal State Long Beach and received an MBA in Entrepreneurship from USC Marshall School of Business. After finishing school and working for companies such as Marriott Hospitality, Dreamworks, and UCLA Medical Center, Bones realized there was a need for small businesses to have access to the same technology solutions that large corporations leverage.
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