Gift card scams are on the rise nationwide. Here’s how they work

LINCOLN, Neb. (KLKN) – Gift card scams are on the rise, especially during the holiday season.

These scams are up 50% nationwide, according to the Better Business Bureau.

The BBB said online shoppers are hit the hardest.

Gift cards have been a popular medium for scammers for years because once they have the 16 numbers on the back, the money is already in their pocket.

As digital wallets and digital gift card compatibility grew, so did the ease and frequency of these scams. The BBB said gift cards are more convenient than ever.

Some efforts between law enforcement and retailers to curb this activity have shown success, but officials warn that scammers are resourceful.

They persuade people to buy gift cards by impersonating online sellers, pet breeders, government or sweepstakes officials, and others.

Government organizations are frequently impersonation targets, as fear of punishment or sanctions are often used to make victims act quickly.

Technology companies are often also commonly impersonated by scammers, as they can quickly spend stolen gift cards on expensive technology to resell. 

By examining court documents of some people arrested for these scams, experts found that they often work so well because they have a large backing.

In many cases, gift card fraud involves a complex, multinational network preying upon vulnerable populations. 

Experts interviewed by the BBB said the instantaneous transfer of funds from one party to another enables fraudsters to act fast, either spending the money or shuffling the money onto a new gift card to obscure their crime.

The Better Business Bureau provided common red flags and tips to prevent yourself from falling victim to scams.

Red flags for potential gift card scams  

• Businesses or governmental agencies requesting gift cards 
• Cold calls about overdue tax payments 
• Paying for services or items with unrelated gift cards 
• Online sellers requesting gift cards as payment
• Anyone asking to be sent a number or PIN over the phone or email
• Promises to be reimbursed through check
• A message from a work superior asking to purchase gift cards 

Tips to avoid falling for a gift card scam 

• Be on guard if anyone ever asks for payment through a gift card. 
• Stop immediately if a person claiming to be from the government asks for a gift card. 
• Contact the gift card seller, the actual business or government organization supposedly asking for money, and the BBB to ask whether you are encountering a scam. 
• Keep all information related to purchase if scammed. 

Where to report a gift card scam 

• Better Business Bureau or BBB Scam Tracker 
• Federal Trade Commission or call 877-382-4357. 
• Internet Crime Complaint Center
• If you have bought a gift card as a part of a scam, report it to the company.