Gift cards are increasingly becoming an accepted form of currency in our culture. Given as gifts, incentives, and even as a popular way to pay friends and family, gift cards rarely sound any alarm bells when they are purchased or given. Unfortunately, just like all forms of payment and currency, the cyber-criminals have figured out multiple ways to exploit the goodwill behind a gift card. The fraud is generally limited to the value of the card, and therefore not our most pressing form of attack. Still, as we approach the holiday season, you will likely be seeing more and more gift cards being exchanged and therefore we’d like to see you protected.

Here are some of the more prevalent gift card scams we have seen throughout 2018-2019.

Gift Card Scams

  • IRS Threats: If the scammers had their way, they would have everyone believing that the U.S. Internal Revenue Service is after them for tax evasion. These calls and emails have been rampant this year. T=It works like this – the caller, who has been trained to be very convincing,  threatens that a tax evasion arrest is imminent unless payment is made immediately. They demand payment through either iTunes gift cards or  store gift cards. If the gift cards are purchased, the scammer will ask the victim to repeat the gift card numbers over the phone, which is how they gain access to the funds, and will often try again for additional funds if successful. Important: The IRS will never demand money via gift cards; nor will any reputable company or government agency.
  • Careful Buyers: Sometimes you receive gift cards you simply won’t use. Turning to consumer marketplaces such as Craigslist to sell your gift card seems like a great solution, but in this case it is sellers which must beware. A buyer will contact you and ask if you will set up a three-way call to verify the balance before they buy the card. This seems like a reasonable request from a careful buyer. However, they can then listen into the card’s numbers (or record the touch tones) and drain the card without purchasing it from you. If you want to sell any unwanted gift cards which you receive this holiday season, your best option is a reputable gift card reseller.
  • Compromised Cards: If you purchase gift cards from a rack at a retailer, never choose one of the first few cards in the stack. Instead, go to the middle or the back of the stack and choose your card. In this way, you may be able to avoid another one of the criminal’s favorite scams. The perpetrator copies a card number from the gift card, then replaces the card at the front of the rack, and simply waits for someone to pick up and purchase that card. Once the card is loaded at the register, the scammer simply uses the number to check the balance, and purchase something online immediately. By the time the buyer has returned home, the card is already empty.
  • Checkout Criminals: Unfortunately, this scam involves retail employees. You hand the cashier a gift card and the money to “load” the card, but the cashier loads a different card and hands you back an empty one. The cashier then collects multiple funded gift cards throughout the shift, leaving consumers holding worthless cards. If you are purchasing a gift card, keep your eyes on the card at all times. If the cashier (or an accomplice, such as another worker) tries to distract you during the transaction, be wary. Immediately check your activation receipt against the card you received – the numbers on them must match. If not, alert a manager before leaving the store.

While thinking about the ways that people can cheat us is not a pleasant topic, it is best to be prepared. In an age of online transactions, having the physical gift card in hand is not longer necessary to steal your money. So this season, be prepared and be careful – and enjoy your gifts!

Alliance IT is dedicated to making sure our clients are safe and protected against cyber threats and online criminals. Call today to ensure that your data, and your business, are protected.