Kroger Gift Cards

Why do scammers want gift cards?

woman using a gift card to pay in a shop

Most people use gift cards to treat a loved one or say thank you to an employee. But did you know that gift cards are also popular with scammers? Since 2015 there has been a significant increase in scammers demanding payments by gift card.

So why do scammers want gift cards? Gift cards are like cash in a lot of ways – they are hard to trace and once used, it’s hard to get your money back.

Read on to find out more about how these scams operate and how to avoid becoming a victim.

Why do scammers want gift cards?

While gift cards tend to be popular with consumers because they are a convenient option for gift giving, they are also attractive for scammers. Unlike wire transfers, gift cards are easily purchased and can provide instant funds, without setting off any alerts.

Gift cards are not tied to an account or person, so they don’t have the same restrictions as a credit or debit card. This not only gives the scammers anonymity, it also makes it difficult to trace the funds once they’ve been spent. Along with this, gift cards are easily converted. Scam artists can use them to buy expensive merchandise which can be resold or simply trade the card value for cash or cryptocurrency.

The popularity of gift cards, especially during the holiday season, also provides scammers with the perfect cover. At peak sale periods, it’s not unusual for someone to buy multiple gift cards in one transaction. Plus, with so many stores and online retailers offering gift cards and eGift cards, it’s hard to notice suspicious purchase patterns across brands. As a result, gift cards are an easy target for scammers.

What do scammers do with gift cards?

There are several known ways scammers use gift cards, from claiming you owe them money to stealing gift card codes. So, how do gift card scams work?

Many of the most common gift card scams begin with a phone call. This call could be from someone claiming to be an IRS representative collecting taxes and fines, or they could say they are tech support and require funds to fix your computer. All these examples play on three emotions – fear, hope and sympathy – to instill a sense of urgency and panic.

From this point, the caller will ask you to make the payment with a gift card. Usually this is for a popular brand, such as Target, Apple, or Google Play, but they could also ask you to purchase several cards from large department stores. The caller might insist on staying on the phone while you go to the store or make the purchase online – this is a major red flag that you are a victim of a scam.

Once the cards have been purchased, the caller will ask for the gift card numbers and codes. With these details, the scam artist has instant access to the funds and your money is gone.

Another way scammers use gift cards is by going into stores, writing down the codes and waiting for the card to be activated. Once it’s activated, they can use the stolen gift card to purchase goods online. To avoid falling victim to this scam, always check the gift card packaging to see if it has been tampered with. If you think it has, tell a member of the store’s staff and choose another one.

Scammers are constantly changing their routines, so just remember that if someone is asking for payment by gift card, it is a scam – gift cards are for gifts only.

Can stolen gift cards be traced?

In general, it is very difficult for gift cards to be traced. A main component of gift cards is that they are not attached to an individual or an account, so there is no personal information linked to them. Even if you use a credit card to purchase the gift card, this does not mean that the stolen funds can be traced.

To counter this, some merchandisers are starting to track purchase patterns, while training employees to question multiple gift card purchases and limiting the value of gift cards within a single transaction. This should help reduce the number of gift card scams in the future.

FAQs

Why do scammers want Google Play cards?

Certain brands and retailers are favored by scam artists for a variety of reasons. It may be because the store sells high-value items – such as electronics or technology – which the scammer would be able to resell for a large profit. This is the case for shops like Target, eBay and Walmart. In the case of Google Play and other online platforms, it is easy for the scammers to sell the gift card code in an online marketplace and disguise their stolen product among standard discounted gift cards.

What should I do if I’ve been involved in a gift card scam?

If you’ve been involved in a gift card scam, the first thing you should do is report it. Each company will have their own process in place for reporting fraudulent activity, from dedicated phone lines to online chat. Visit the appropriate website for further details.

Can a stolen gift card be deactivated?

Some retailers can deactivate fraudulent gift cards, so it’s best to act quickly and get in touch with them if you think your gift card funds have been stolen. They will then be able to advise you on the next steps.

Report fraud

If you have been the victim of a gift card scammer, you need to report it immediately. Let the card company know that the gift card has been used in a scam – this may help protect yourself and others from future suspicious activity.

All fraud should be reported to the Federal Trade Commission (FTC). This enables law enforcement agencies to launch the relevant investigations and ultimately stop the scammers. Any IRS impersonation scams should also be passed onto the Treasury Inspector General for Tax Administration.