From Birch Gold Group
You might think a gift card should be something you just can’t put a negative spin on. While the recipient might not always be perfectly content with the available choice of the store or what can be purchased, gift cards have long served as a ubiquitous token of appreciation. They’re given out of kindness (or kindness mixed with a bit of promotion). Gift cards are a way for aunts and uncles to acknowledge nieces and nephews during holidays, shorthand for, “I don’t quite know what you want so find yourself something you’ll like.” Employers use gift cards because, according to research, employees think gift cards have a higher perceived value than an equivalent cash bonus.
Yet, as is so often the case, scammers have found a way to turn gift cards a weapon to separate their victims from their cash.
Gift cards requested as payment for a scam
A recent survey by AARP, an advocacy group for older Americans, showed that 1 out of 10 people targeted fall victim to gift card scams, and that the sums involved can be significant. A recent BBB study calculated the average amount stolen by a gift card scam is $700.
While it sounds like a low-profit scam, the Federal Trade Commission said that $245 million has been swindled from Americans through this method since 2018. What’s worse, the FTC says that the rate is rising exponentially and that it is one of the most under-reported scams, meaning that the actual figure is likely much higher.
One tragic story from the BBB study:
A Springfield, Missouri, woman in her 80s received a call in November 2020 from someone who claimed to be with Apple and told her that her iCloud storage was compromised. The woman was instructed to buy gift cards in order to protect her data and tell any cashier who questioned the transaction that they were gifts for grandchildren. She subsequently purchased 29 $500 gift cards to Target and Walmart, scratching off the numbers on the back and photographing them with her phone. In total, the woman lost $14,500.
One victim described losing $10,000 in a single instance of gift card fraud, and the familiar elements were there. The scammers reached out with a well-rehearsed procedure, showing that the attackers are orchestrated and have plenty of experience when it comes to momentarily distracting their targets. In this particular instance, the victim was told that her account was hacked and that a gift card will therefore have to be used to facilitate a payment.
The scammers are not only organized, but also quick to cash out on the scam by asking the victim for the number of the loaded-up gift card. It makes for a fraud that is not only difficult to track, but also difficult to prevent due to the variety of gift cards available and the various methods in which scammers attempt to convince their targets to load up the cards.
The most common types of gift card scams
According to the BBB, the most common types of gift card scams include:
- government impersonators (especially Social Security and the IRS)
- business email compromise frauds
- tech support frauds
- romance scams
- fake check scams
- prize/sweepstakes scams
- online sales of nonexistent vehicles
The BBB has a very thorough and well-researched report, Why Scammers Love Gift Cards, that has much more detail.
Nonetheless, the AARP is launching a campaign to raise awareness among retailers when it comes to people looking to load up gift cards with large sums of money. Whenever a person requests a gift card with a considerable amount of money attached to it, the retailer should inquire as to the occasion, which should help weed out these kinds of scams fairly easily. As for the targets themselves, the AARP stated that any attempt by a stranger to get one to pay for something, such as a bill or a fee, through a gift card should be considered a scam.
Knowing what to look out for is key to defending against most scams. To help you detect and avoid financial scams, Birch Gold Group has pulled together an extensive resource guide that is now available on our website. The Birch Gold Group Scam Protection Resource Guide helps you identify warning signs and provides you with tips on how to avoid fraud.
With global tensions spiking, thousands of Americans are moving their IRA or 401(k) into an IRA backed by physical gold. Now, thanks to a little-known IRS Tax Law, you can too. Learn how with a free info kit on gold from Birch Gold Group. It reveals how physical precious metals can protect your savings, and how to open a Gold IRA. Click here to get your free Info Kit on Gold.
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I NEVER give gift cards. Not only does it say “I don’t know what you’d like” but it says “You need to buy it here at THIS store.”
I wonder if gift cards get outlawed when they start becoming an underground currency in the New World Order.
So a sort of leading indicator for the gift card known as cash…on “its” way to digiftedness: anonymous digits’ll gifteth, & Indian gifteth, depending on anonymous assessments of reservation rules conformity. At least that’s the china syndrome boring its way thru the planet.
I usta think about what a germanrussian combine’d do to sammyland. Now I think about that berserker-squared (older days anyway) agin the yellow stain…or about the 3 of ‘em joining together. Sammy’s ginned up a lot of ill will. And the wielders of the divided conquerates known as countries bear ill will towards pretty much everybody.
Just give cash or a check for b’days, etc. unlessthe person specifies: “I’d be ok w/ gift card to kohl’s, wal mart, or Dillards, etc.
Gift cards are a scam, even without the scam above.
Simply put, they restrict your money to one store. Even if you use them, they are an interest-free loan to said store.
But the real scam is that the vast majority of gift cards are not fully used up. They are lost, damaged, or thrown away before the balance hits zero. All the remaining balance becomes 100 percent profit to the corporation.
I used to do eviction clean-outs at apts. Saved every gift card I found. Lots had never been used, but the average remaining balance was in the neighborhood of about 4 bucks. Average card face value was $25. So the average “free profit” to the corp was 16 percent.
By your reasoning a good deal is likely left on the government’s COVID gift cards. Do the unclaimed funds revert to a sham organization run by Hunter Biden?
I don’t know anything about gov’t gift cards. But the same thing happens with the “coin” laundromats that use re-loadable cards. Same with the chips and tokens used at casinos. Same thing with pre-paid bus passes. And so on.
Here is an article on the gift cards. Seems like my estimate of leftover money was spot-on.
As for gov’t, that article suggests that some gov’ts are trying to claim the left-over cash as “unclaimed property” that they can sieze. LOL.
BTW. Social Security is the same thing, except when they passed it at a retirement age of 65, that was coincidentally the average life expectancy at the time. They had no intention of ever paying out. Which is why they spend the money as it comes in.
ANY person saying they represent a company, government or in-trouble relative and asks you to buy a gift card(s) IS a scammer. Its like the nigerian letter, a scam and it amazes me how many people still fall for it.
Even the click the UPS link and the URL ISN’T a UPS address. My FIL got such an email and asked if he should click it. I asked did you order ANYTHING recently that was shipped UPS?? answer was no. Then why the smeg would you want to click it???
I made a helmet visor way back in the day and got an order from a guy in spain. Couple thousand dollars worth. Gave a quote on product and shipping. Got a cheque a couple weeks later for the order. The cheque was a BoA cheque and was a few hundred more than the order was worth. The guy said it was a mistake by the secretary and to just send the product and wire the difference back.
I took the cheque to the bank and asked them to clear it asap. Three to four week min. to clear. My alarm bells started going off the branch manager came out to have a look at the paper. He said it was a good copy but that it was fake. They kept the cheque, I kept my product and bank account balance.
I went back to say I’d mail the cheque back and they could send me a new one. In the end they figured I was onto them and cut all comms, I was hoping to scam the scammer. When I asked them to wire me 50% is when they left the arena. Criminals are clever… when the bells ring… listen to them
Way behind the times.
Gift cards have been amateur/script kiddie monetization since before 2016. It is literally how newbie Nigerian scammers (mostly migrated to BEC scammers these days) get trained.
$245M since 2018 may seem like a lot, but IRS tax fraud and BEC generate roughly that in a single month.
The monetization pipeline runs through crypto currencies these days – you can get 10% to 20% discounts vs. say, bitcoin, in Amazon/Walmart/etc gift cards on sites like Paxful.