Gift Card Scams

Gift Card Scams

Updated on December 3, 2021

Gift cards make gift-giving easy and convenient. Unfortunately, they have become a popular way for scammers to dupe you into giving them money. With gift cards, they act like cash, which makes them appealing for scammers. Once the card is used, it becomes very difficult or impossible to get that money back or trace it back to the individual. According to the FTC, this type of fraud has increased by 270% from 2015 to 2018. And it’s important to understand what they are, because you have no right to dispute the charges if you become a victim.

A gift card scam occurs when a scammer demands that you make a payment in the form of gift cards for a set amount and is often initiated through contact either by phone, text, or email. Someone may call you and claim to be a representative from the IRS, a financial institution, or a local organization. A cybercriminal may email you with a bogus phone number to call or include a fraudulent link that will install malware on your computer. They may even pose as a family member or friend to deceive you.

A common theme with gift card scams is a sense of urgency or demands for action. Fraudsters will insist you need to act right away, or there will be consequences, like your computer will get locked or even that you’ll be arrested. They may claim there is fraudulent activity on your account, and you need to act quickly to correct the error. Alternatively, they may use a positive approach, like stating you’ve won a prize and must pay fees to receive it.

Once a scammer has your attention, they tell you the way to resolve the problem or claim your prize is to make a payment in the form of gift cards. They often request to stay on the phone with you while you purchase gift cards in the amounts they request. To avoid drawing attention to a large transaction, they may suggest purchasing the cards from multiple retailers. After the gift cards are purchased, they will demand the gift card number and PIN. When the scammer has the gift card information, they can immediately use the card and deplete the funds.

Unlike many other scams where a financial institution may be able to recoup the money you’ve lost, you have no dispute rights if you become a victim of a gift card scam. The money is simply lost. This is because when you purchased a gift card in these scenarios, you handed over cash or authorized the retailer to charge your debit or credit card. And once you paid the retailer, you were given the card that you purchased, so they’ve met their obligation. This leaves financial institutions with nothing to dispute – there was no unauthorized access to your account, and you paid for something you received.

What should you do if you sense you’re being scammed?

If you receive a suspicious phone call that threatens you or demands action, hang up and contact the company directly to determine if the call was legitimate.

  • If you receive a suspicious email or pop-up on your computer, do not click on any links.
  • If you’ve purchased gift cards, contact the card issuer immediately to see if the cards can be canceled.
  • Contact local authorities and your financial institution to notify them of any scams or suspicious activity.

Keep in mind that gift cards are not a legitimate way to pay for bills, fees, or make payments to organizations. For more tips on how to avoid scams and keep your money safe, visit our blog and click on the Security category.


The content provided in this publication is for informational purposes only. Nothing stated is to be construed as financial or legal advice. Some products not offered by PSECU. PSECU does not endorse any third parties, including, but not limited to, referenced individuals, companies, organizations, products, blogs, or websites. PSECU does not warrant any advice provided by third parties. PSECU does not guarantee the accuracy or completeness of the information provided by third parties. PSECU recommends that you seek the advice of a qualified financial, tax, legal, or other professional if you have questions.