Milwaukee, Wis. – Today’s scammers want gift cards as payment, leaving those unaware of this tactic vulnerable to schemes designed to commit fraud. Better Business Bureau (BBB) research shows fraud reports to BBB Scam Tracker involving gift cards as a form of payment spiked in the first three quarters of 2023, up 50% from the same period the year prior. Scammers have doubled down on gift cards as a method to steal money from consumers – especially online shoppers – leading retailers to implement new fraud prevention solutions in response.
A new BBB study update, “Growth of gift card scams causes retailers to innovate solutions,” examines patterns of reports, dives deep into court documents, reviews financial losses, and highlights interviews with affected consumers. The goal is to educate everyone on the tactics scammers use with gift cards.
Key findings:
- Technology, like algorithms meant to detect fraudulent behavior, helps retailers stop scammers in their tracks and sometimes return money to customers.
- Fraudsters leverage international networks to convince consumers to hand over gift cards.
- Advance fee loans, government impersonation, phishing and lottery/sweepstakes top the list of scam types used most often to obtain gift cards.
- Scammers frequently seek gift cards from big-box, technology and online stores.
Key statistics reported to BBB, Federal Trade Commission (FTC) and Canadian Anti-Fraud Centre (CAFC) since 2020 about gift card payment scams:
- 3,918 BBB Scam Tracker reports
- 177,074 reports to the Federal Trade Commission’s Consumer Sentinel Network with $690 million in losses
- 9,259 reports to the Canadian Anti-Fraud Centre with losses totaling 15.6 million Canadian dollars
In 2021, BBB’s International Investigations Initiative examined gift card payment scams in an in-depth study, “Gift card payment scams: BBB reveals why scammers love gift cards.” Since then, retailers have identified several methods to protect consumers, but warn that it is impossible to stop all scams as fraudsters continue to find ways around safeguards.
Richard in Tempe, Arizona, reported to Scam Tracker he received a call from someone claiming to be from Amazon. There was a suspicious charge on his account, they said, and it looked like possible identity theft. The person claiming to be from Amazon offered to connect him with someone from the government. He was asked to withdraw $10,000 and convert it to gift cards. He sent several hundred dollars before realizing everyone involved were scammers.
In Dahlert, Texas, Blou told BBB she found a golf cart for sale on social media for $2,000. The seller asked for payment in gift cards. She paid, only to have the scammer ask for another $1,000 before disappearing with her money.
BBB tips to spot a gift card scam
- Be wary of anyone asking for payment with a gift card, including “government” agencies. No legitimate government organization will ask you to pay with a gift card.
- If you suspect a scam, contact the gift card seller, the actual business or government organization supposedly asking for money, and BBB to ask if you are dealing with a scammer. To find contact information, go directly to the organization’s website rather than search for their customer service number, which can be spoofed by scammers.
- Keep all information related to your purchase if you are scammed, because some retailers may require that information for refunds.
- If you suspect fraud, act immediately, contact the gift card seller or the number on the back of the card to report it.
- Follow advice and report suspected scams to BBB Scam Tracker, Federal Trade Commission and the Canadian Anti-Fraud Centre.
Visit BBB.org to check out a business or register a complaint, BBB Scam TrackerSM to report a scam and bbb.org/scamstudies for more on this and other scams.
View the online version
For more information or further inquiries, contact the Wisconsin BBB at www.bbb.org/wisconsin, 414-847-6000 or 1-800-273-1002. Consumers also can find more information about how to protect themselves from scams by following the Wisconsin BBB on Facebook, Twitter, Instagram and YouTube.
ABOUT BBB: For more than 100 years, the Better Business Bureau has been helping people find businesses, brands and charities they can trust. In 2021, people turned to BBB more than 200 million times for BBB Business Profiles on 6.3 million businesses and Charity Reports on 25,000 charities, all available for free at BBB.org. There are local, independent BBBs across the United States, Canada and Mexico, including BBB Serving Wisconsin which was founded in 1939 and serves the state of Wisconsin.
