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November 18, 2019
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Avoid Gift Card Scams This Holiday Season

Updated: November 6, 2024

The holiday season is quickly approaching which means our inboxes and mailboxes are filled with holiday deals and coupons. According to a recent survey by EY, half of U.S. consumers have already started their holiday shopping and 41% are waiting until November/December. While some love finding gifts for friends and family, many don’t, so they turn to giving gift cards. Although these are quick & easy gifts to give, they’re also easy to steal. Scammers love gift cards because there are plenty of ways to steal funds. They use tactics like exposed PINs, fake activation stickers, and gift card exchange sites to steal gift card funds. In this blog, we’ll provide some tips on how you can avoid gift card scams this holiday season.

Check Gift Card PINs

When shopping for gift cards, always check the security seal and make sure the PIN is covered and unscratched. Scammers have a clever trick: they go into stores, carefully scratch off the PIN number on gift cards, jot it down, and wait for an unsuspecting buyer to purchase the card. Once activated, the scammer can quickly drain the balance from the card before the legitimate owner even has a chance to use it. To protect yourself, inspect the card closely before buying—if the PIN is exposed or scratched off, it’s best to leave it behind and find one in better condition. Remember, the convenience of gift cards shouldn’t come with the risk of losing your money to fraud.

 

variety of gift cards at the store
woman activating gift card on her phone

Check The Activation Sticker

Make sure to check the activation sticker on the back of the card before you purchase it. Scammers sometimes place their own sticker over the original activation label, which links to a fraudulent website instead of the retailer’s official system. When you try to activate the card, it routes your information through their site, giving them access to the card number and PIN. Once they have this information, they can drain the card before you even know there’s a problem. If the activation sticker looks tampered with or doesn’t match the rest of the card’s design, it’s a clear red flag. Always buy gift cards directly from trusted retailers or online platforms to minimize the risk of falling victim to this type of scam.

Don’t Make Payments Over The Phone

In 2023, $217 million was lost due to gift card/reload card fraud. Don’t ever make phone payments to someone asking for gift cards, no matter how convincing their story sounds. Scammers often impersonate trusted organizations—such as the IRS, your cell phone provider, or tech support—claiming that you owe a bill or face serious consequences if you don’t pay immediately. They’ll pressure you to buy gift cards and provide the card numbers and PINs over the phone, convincing you it’s the only way to resolve the issue quickly. In reality, legitimate businesses will never ask for payment in gift cards. If you receive a call like this, hang up and contact the company directly using a verified number from their official website. Scammers thrive on urgency and fear, so taking a moment to verify the situation can save you from falling into their trap.
lady on the phone with card in hand
gift card

Protect Your Gift Card Purchase

Use password protection when sending an online gift card to ensure that only the intended recipient can access the funds. This added layer of security requires the receiver to enter a password or PIN before they can retrieve the gift card information, which helps protect against unauthorized access. Additionally, always keep a copy of the gift card receipts—whether physical or digital. These receipts provide proof of the card’s purchase, the activation amount, and any associated transaction details. If the recipient has trouble redeeming the card or if there are any issues with the card balance, you’ll have documentation to resolve the matter. In the case of fraud or disputes, having receipts on hand can be crucial in recovering your funds or reporting the incident to the retailer.

Don’t Like The Gift Card You Received?

Sometimes, you end up with gift cards that may not suit your tastes. One way to sell or exchange these cards is through an exchange website. Be sure the exchange or reselling site you use will guarantee money back if you’re scammed. Some exchange sites will allow people to send the gift card code and get paid before the site receives the physical card in the mail. Once the balance is confirmed, scammers will spend the gift card balance before the buyer receives the card or code. Raise.com is one site that has a money-back guarantee.

Make sure to read and share these tips with friends and family ahead of Black Friday & Cyber Monday! Happy shopping!

multiple gift boxes

 

 

Want to get ahead on saving money for next year’s holiday shopping? Consider opening a Holiday Savings Account at Launch CU. For more holiday money-saving tips, check out our blog 7 Easy Ways To Save On Holiday Shopping.

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