What Are Gift Card Scams?

Chances are, you’ve bought a gift card. After all, gift cards are a go-to gift, with purchases of them steadily increasing year after year. It’s estimated that spending on gift cards in the U.S. will reach $239 billion by 2025, according to Research and Markets.

Because gift cards are so popular, scammers and thieves have found ways to take advantage of them to steal from unsuspecting consumers. That’s why it’s important to be aware of what gift card scams are. Here’s what you need to know about how they work and how to avoid them.

What is a gift card scam?

Americans reported losing $228 million to gift card scams in 2022, according to the Federal Trade Commission. Although gift cards are meant to be gifts, scammers can steal the balances from them. The most common method scammers use to do this is by asking that gift cards be used as a form of payment. However, gift card scams also can involve the sale of fraudulent cards and stolen gift card codes.

Types of gift card scams

From persuading people to provide them with gift card numbers to stealing them directly off the cards, here are the most common ways that scammers take advantage of gift cards.

Gift card payment demand

This is the most common gift card scam, and it typically begins with a phone call from someone claiming to be with a business, organization or government agency. The reason for the call varies. It might be a claim that you owe taxes, that you must pay a fine or that your account has been frozen. The stories can vary, but, inevitably, the caller will ask for a payment with a gift card.

According to the FTC, here are the key signs that a call is a gift card payment scam:

  • The caller will say that you have to make a payment immediately or something bad will happen.
  • The caller will tell you what type of gift card to buy or a particular store where you should buy gift cards. Sometimes, callers will instruct you to go to several different stores. The gift card brands that scammers most commonly ask for included Target, Google Play, Apple, eBay and Walmart.
  • The caller will ask you to stay on the line and will ask for the gift card number and PIN. If you provide those numbers, the caller can use the card—and your money will be gone.

How to avoid gift card payment scams: Government agencies, as well as legitimate businesses and organizations, will not ask you to make a payment with a gift card. Hang up on callers asking for gift cards as a form of payment.

Stolen gift card codes

There are a couple of variations of this scam. In one, thieves grab gift cards off racks in stores and remove the protective strips covering card numbers or PINs to steal those numbers. Some will then cover the numbers up with replacement stickers before placing the cards back on racks in stores. The scammers then check online (or use software to do it for them) to see when money has been loaded onto the cards and use the card numbers to make purchases. Consumers often don’t discover the balance on their cards is $0 until it’s too late.

Scammers also are covering up gift card barcodes with the barcodes of cards that already have been activated. When consumers buy the cards and load money, the money is deposited on gift cards that scammers already have rather than the cards the consumers buy.

How to avoid stolen card code scams: When buying gift cards at stores, look for signs of tampering, such as protective strips covering card numbers and PINs that have been removed or barcode stickers covering up the original barcodes. A better option to avoid cards that have been tampered with is to buy e-gift cards from retailers’ websites and email them to recipients.

Discounted gift card scams

Be wary when buying discounted gift cards online. There are legitimate gift card resale sites that have protections in place to prevent fraud and offer money-back guarantees to customers who have problems using the gift cards they purchase.

However, you should avoid buying discounted gift cards from individuals advertising them on social media or online auction sites. If you see a gift card being advertised at a price that is much lower than the face value of the card, the deal is probably too good to be true. The card might be stolen, fake or already used.

How to avoid discounted gift card scams: The safest option is to buy gift cards directly from retailers. However, if you want to save money and buy discounted gift cards, read reviews about gift card resale sites and make sure the reseller you choose offers a money back guarantee.

Gift card giveaway scams

This scam typically begins with an email or text message that appears to come from a familiar business or organization notifying you that you’ve won a gift card. To claim the gift card, you must provide some personal information or click on a link to a website. However, there is no gift card. The scammers just want your personal information to steal your identity or to sell it.

How to avoid gift card giveaway scams: Don’t click on links in emails or text messages, especially if you’re being asked to provide personal information in exchange for a gift card.

[ See: How to Avoid Gift Card Scams ]

Why do scammers want gift cards

Scammers have increasingly been asking for gift cards as a form of payment for a variety of reasons, according to the FTC. In fact, gift cards check off all the boxes for what scammers are looking for in a form of payment.

  • Gift cards are a fast source of cash because they can be used to purchase items or can be sold.
  • Payments by gift cards allow scammers to remain anonymous because it’s difficult to trace the funds on the cards once they’ve been spent.
  • Gift cards are easy for people to find and buy. And buying multiple cards around the holidays won’t necessarily send up a red flag to retailers.
  • Gift cards have fewer protections for buyers than other forms of payment, often making the transaction irreversible.


Remember, gift cards are meant to be gifts. If someone is asking you to make a payment with a gift card, it's a scam.

What to do if you’re targeted by a gift card scam

The more documentation you have, the better. So whenever you buy a gift card, hang onto the receipt as your proof of purchase.

If you buy a gift card to make a payment or discover that a card you have bought has been compromised and has no balance, contact the card issuer immediately. The faster you report the fraud, the more likely you will be able to get your money back. That said, there’s no guarantee that you will be reimbursed.

If you lose money to a gift card scam, file a report with local law enforcement. This report might help boost your claim with the card issuer that you were a victim of fraud and help you get your money back. Also, report it to the FTC at ReportFraud.ftc.gov.

If you shared your personal or account information with someone who might be a scammer, freeze your credit reports with all three credit bureaus—Experian, Equifax and TransUnion—to prevent thieves from opening new accounts or lines of credit in your name. You also should sign up for credit and identity monitoring to be notified if there are changes to your credit report or if your personal information is being misused. A service such as Carefull provides credit and identity monitoring, up to $1 million in identity theft insurance and account monitoring that will notify you of unusual transactions and signs of fraud, including gift card purchases.

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