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Watch out for Gift Card Scams

Criminals may demand payment via gift card or steal the value of cards at retailers


spinner image a present wrapped in red paper with a blue bow
Photo Illustration: Matt Chase

You may think of gift cards as easy way to take care of your holiday shopping list but beware, scammers like the convenience of them, too.

The money you put on gift cards is like cash — once it’s spent, you almost certainly can’t get it back. Scammers have developed two distinct ways to exploit that fact: gift card payment scams and outright gift card theft.

According to the Federal Trade Commission (FTC), at least $217 million was stolen through gift cards in 2023. Apple gift cards were the most requested card, followed by Target, eBay, Walmart and Amazon gift cards.

Why do scammers want gift cards? Because it's harder to trace that money, and once it's gone, it's gone,” says Melanie McGovern, director of public relations at the International Association of Better Business Bureaus.

It’s easy for scammers to instruct their victims to purchase them. Unlike cryptocurrency — another way scammers ask to have money sent — “most people know how to use gift cards,” says Jennifer Pitt, a senior fraud and security analyst at Javelin Strategy & Research, which advises clients in the financial services industry.

Video: Gift Card Payment Scams

How gift card scams work

There are two types of gift card scams. In one, scammers want you to use gift cards to pay them. Scammers insist you buy gift cards and read them the serial and personal identification number (PIN) on the back to quickly pay off a debt, buy something or loan money. More than a third of US adults have been approached by scammers seeking payment by gift card, according to an AARP survey.

The second type of scam involves stealing the value of gift cards you give to loved ones. AARP's 2024 study "Holiday Fraud: Scammers Continue to Steal Holiday Cheer" found that 70 percent of shoppers plan to buy gift cards for family or friends. But your generousity may end up benefitting a criminal. Crooks can either steal steal the value from cards sitting in unattended store racks or use malicious software to find and drain the value you've loaded on a card. AARP found that more than 1-in-4 consumers have given or received a gift card with zero value. 

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Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.

Knowing the red flags of a gift card scam may save you from handing over your hard-earned cash to a scammer. 

They claim to be collecting a debt. Scammers may claim to be from the IRS and tell them you owe money. Or they may pretend to be from Social Security and tell you there’s a problem with your account. Be aware: “No legitimate government agency will ever accept payment in the form of gift card,” says Pitt.

They claim to be tech support. You may get a pop-up ad or an email from scammers who pretend to be from a tech company warning that your computer has been infected by a virus or a security service on your computer is about to expire. They’ll ask you to pay for their assistance in gift cards.

They imitate your boss or a friend. They ask you to do them a favor and buy gift cards for clients or to get them out of a jam. “Because of the amount of deep fakes that are going on with voice and video … you shouldn’t trust (that call),” says Pitt. Phone your boss or your friend back at the phone number you have for them. The same goes for any calls you get from a grandchild who appears to be in distress and says they need money immediately.

They ask for an emergency loan. A romantic partner you’ve gotten close to online, but never met in person, may suddenly seek a loan for a crisis.

They are selling something. Someone claims to be selling puppies, may ask for payment in gift cards Criminals also lurk on resale and auction websites, ostensibly offering goods at an attractive discount. They may also create fake shopping websites imitating a known retailer. Once they get you interested in buying, they’ll ask you to pay with a gift card. As soon as they get the card number and PIN, they vanish, and so does the money on the card.

They demand fees. A phony representative from a sweepstakes tells you you’ve won big, but need to pay taxes and fees. Only scammers ask you to pay fees, back taxes or bills for services with gift cards.

They offer phony giveaways. You get an email or text, supposedly from a familiar store or organization (including, on occasion, AARP), saying you’ve won a gift card. To claim it, you just need to provide contact information, click through to a website or answer a few survey questions, often about your finances or health.

They steal the card’s value. Criminals have developed ways to drain the cash from gift cards you buy. Not surprisingly, these scams spike around the holidays. Thieves go to stores and surreptitiously scratch off the film strip on the back to get the PIN, which they cover back up with easy-to-obtain replacement stickers. Or they steal the balance of your gift card remotely. Using malicious software, they can automate the hunt for cards and their balances. Once found, the thieves snatch the value, leaving you with an empty card.

How to protect yourself from this scam

Mind where you buy. When buying cards, you plan to use yourself or give as presents, purchase them directly from the business that issued them. If you buy online, “Don't purchase it from a company that says ‘we specialize in digital gift cards.’ …  Right now, it's too hard to tell which ones aren't legitimate,” says Pitt.

Doublecheck the value. lt’s always a good idea to check that the funds are there before leaving the store, says McGovern. And if you are buying several gift cards during the holiday season, “Make sure each and every one is scanned at the register,” says McGovern. And if you receive one, “Don’t let it sit. Treat it like cash."

Keep the receipt. “Hang on to that receipt any kind of documentation in case something does go wrong,” says McGovern.

Avoid the racks. Cards on store racks can be tampered with and spotting which one’s have been opened and had their value stolen isn’t always easy. “Criminals are getting really good at making sure you can't tell if the package has been tampered with,” says Pitt. It’s safest to buy from places that keep gift cards behind the counter, says McGovern.

Don’t pay via gift cards. Pitt suggests offering a different payment method if someone asks for payment via gift card, “Something like credit card … that can easily be tracked or refunded. If they say, no, it's a scam.”

Protect your personal information. Be careful not to share bank account numbers or social security with anyone in exchange for a gift card.

How to report problems

Immediately contact the retailer that issued a gift card you used to pay a suspected scammer. If money remains on the card, you might be able to get it back. You often will find contact information on the card.

Report the theft to local law enforcement, as well as the FBI’s Internet Crime Complaint Center, and your state's attorney general. The more information authorities have, the better they can identify patterns, link cases and ultimately catch the criminals.  

Call the free AARP Fraud Watch Network Helpline (877-908-3360) to speak with trained specialists who can provide support and guidance on what to do next and how to avoid scams in the future. The AARP Fraud Watch Network also offers online group support sessions for those who have been a victim of a scam.

This story, originally published in 2021, has been updated with advice from experts.

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spinner image cartoon of a woman holding a megaphone

Have you seen this scam?

  • Call the AARP Fraud Watch Network Helpline at 877-908-3360 or report it with the AARP Scam Tracking Map.  
  • Get Watchdog Alerts for tips on avoiding such scams.