Beware Christmas gift card scammers: seven devious tactics

Scams involving gift cards are expected to surge this holiday season - with crooks deploying ever-more elaborate tactics to target consumers.

While they are the ideal gift for anyone who's hard to buy for, they also offer less protections than typical payment methods, such as credit cards, so when a person loses their gift card cash it's often gone forever.

Scams involving gift cards have increased every year since 2018, official figures from the Federal Trade Commission reveal. Nearly 40,000 people reported fraud worth $148 million linked to gift cards in the first nine months of 2021 - but the true figure is likely to be much higher.

The top ranked brands by dollar losses are Target, Google Play, Apple, eBay and Walmart. 

Here, DailyMail.com identifies seven of the main ways fraudsters target gift card users - and simple ways you can defend against them. 

Gift cards are an easy present for someone who's hard to buy for - but they are particularly vulnerable to scammers

Nichelle Laus posted a now-viral TikTok which revealed a scammer had placed a fake barcode over the gift card she was looking to purchase. It's one of several ways crooks will try and steal balances

The fake barcode scam

A video alerting shoppers to perhaps the sneakiest tactic used by gift card crooks went viral on TikTok earlier this month.

It involves scammers covering the barcode of a yet-to-be purchased gift card with a sticker showing a barcode linked to a card they own.

When you take the card to the checkout, the clerk will scan it without any issues - and you will believe you've just activated the card you wanted to purchase.

But instead, the barcode linked to the scammer's card is loaded with the funds - not yours, which means they can spend your money before you even realize. 

The simplest way to avoid being caught out is to run a finger over the barcode before you make the purchase to ensure it's not been covered or tampered with.

Nichelle Laus, who shared footage of the moment she uncovered the scam, showed the moment she went to purchase a PlayStation gift card, but realized the barcode was covered with a sticker.

A cashier scanned the barcode and the checkout screen revealed the barcode was actually linked to a totally different product.

The peek scam 

Dubbed the 'peek' scam, this is where fraudsters trawl through gift card displays and make a note of their serial numbers. 

To deter crooks, many retailers have added scratch-off silver coatings to hide the pin needed to activate the card - but even this won't stop the most determined of scammers. 

They will simply scratch off the pin, write it down and then either cover the area with a sticker or apply a new coating so the consumer is none the wiser. 

They then just sit back and wait until someone purchases the card, regularly checking its balance or status online until it's been activated - and spend the cash before the recipient of the gift gets the chance.   

This graph produced by the FTC shows that losses to gift card scams are increasing, with a huge $148 million dollars reported stolen in the first three months of 2021. The data only includes reports to the FTC - meaning the true figure is likely to be much higher

Tiffany Schultz, the a Regional Director at the Better Business Bureau, said: 'Scammers are notorious for opening the packaging, scratching off the numbers, recording those numbers.

'And as soon as you go ahead and purchase those gift cards they have emptied the gift card before the gift recipient can even get it.

'Everybody is joining in this fight against fraud to help this gift card fraud, minimize (it), but it's never going away.' 

The fake website scam 

Crooks setting up fake websites to ensnare online shoppers is a common trend around the holidays - and gift cards are no different. 

It's easier than ever for scammers to create a page that looks like the real deal. And many will appear to offer gift cards at discounted rates to further entice consumers. 

In some cases, they'll even create a site that mimics the company whose gift card they are purporting to sell.

They'll then either try to get the site included in search engine results, or make fake social media posts that link back to it.

eBay gift cards are some of the most commonly-targeted by scammers, according to the Federal Trade Commission

The rest is worryingly simple. The consumer duped by the website selects the card they want and makes a 'purchase'. But in reality, the shopper gets nothing, while the scammer is now in possession of the victim's bank or credit card details.

The simplest way to check for this scam is to always make a purchase through a company's official website. Checking the URL is usually the best way to ensure you're really on their website.

When you're clicking a link on social media, check who's posted it. Don't trust anything that's not from an official page.

The balance check scam 

This scam seeks to take advantage of shoppers who've received a gift card and want to check how much is on it.

Similar to the fake website scam, some crooks will create fake sites that claim to reveal how much cash is loaded onto a card. These typically look almost identical to the company's official site.

Victims are then tricked into entering the serial number and pin, and this information goes straight to the scammer who can use it to drain the card. 

Always check the URL of the page you're visiting. If it's suspicious, leave the page and find the correct site. Most companies will also let you check a balance in store.  

Gift cards are one of the most popular Christmas gifts - but they're also one of the most common targets of scammers 

The resale scam

The popularity of gift cards has created a new market in resales - where people sell unwanted cards online, often for slightly less than face value.

There are now scores of specialist websites dedicated to helping people trade cards for cash - but fraudsters are using them too.  

Scammers will try their luck by arranging to sell gift card codes - the serial number and pin - to these sites without providing the physical card.

But after the resale website has agreed to buy it and confirmed the balance, they then quickly make a purchase using the card.

That means whoever then buys the code will receive a lower balance than expected - or nothing at all.

This FTC chart shows the brands whose gift cards were most likely to be subject to scams in the first three months of 2021.

The three-way call scam

This tactic is typically used to con people who are reselling unwanted gift cards on sites such as Craigslist or eBay.

A scammer will contact the seller and arrange a purchase. They'll then say they want to confirm the gift card by carrying out a three-way phone call with the seller and the retailer the card is for.

It might sound elaborate, but it's actually quite simple. Most big firms have a telephone service that let gift card owners simply call up and type in the numbers, before an automated voice confirms the balance.

The scammer will convince the seller to make the call - then decipher the gift card's numbers through the touch tone sounds. They will then spend the money and the consumer will never receive their payment.

The debt scam 

This is one of the most common gift card cons out there - not just around the holidays but all year round, accounting for most of the money lost to these scams.

A victim will be contacted by a crook and told they owe money for a debt which they can settle by purchasing gift cards. 

Apple gift cards are one of the most common targets of scammers

Scammers often prey on vulnerable people by claiming they're from an official such as a government agency or bank. Using scare tactics, they'll tell their victim they need to pay up fast, or face a fine or other punishment. 

Then they'll say the victim can pay by purchasing a gift card either in store or online and sharing the serial numbers along with any pins.

As the FTC says in a handy guide on this: 'Anyone who demands to be paid with a gift card is a scammer'. 

Never be afraid to challenge a person who seems suspicious or intimidating when they contact you and ask for money. If it doesn't stack up, then hang up.

Schultz, from the Better Business Bureau, added: 'They’re untraceable. There’s no way to track these gift cards. And once you have handed over the gift card numbers and the PIN number, your money is gone. It’s not recoverable.'

In the first nine months of 2021, nearly 40,000 people reported fraud worth $148 million linked to gift cards - but the true figure is likely to be much higher