Gift cards are wonderful and useful – and are more popular than ever. They’re highly-requested on wish lists, and more people than ever are using gift cards to save money – by buying them from sites like EJ Gift Cards at a discount.
At EJ Gift Cards, we are big believers in the power of gift cards. That’s why we buy hundreds of different gift cards, and sell Target gift cards and sell GAP gift cards for discounts. We think that everyone should be able to benefit when using gift cards.
But that’s not always the case. Gift cards are not perfect. Unfortunately, they are becoming more and more popular as a way to scam unsuspecting consumers. There are dozens of scams out there involving gift cards – and in this article, we’ll take a look at some newer variations on gift card scams.
With this article, you’ll be able to recognize some of the most common gift card scams in 2018. We’ll also discuss how you can avoid being victimized by a scam, and talk about the individuals who are the most at-risk of being targeted by scammers. Let’s get started.
Why Do Scammers Want Gift Cards?
You may be wondering why scammers ask for gift cards, rather than cash payments. It may seem strange – most scammers ask for iTunes gift cards, Apple Store gift cards, and Google Play gift cards, among others.
In fact, iTunes gift cards are so popular among scammers that Apple has a dedicated webpage used to alert customers to the issue.
Why is this? Well, there are a few reasons.
First, most gift cards such as iTunes gift cards can be activated anywhere in the world, with just the physical number and PIN on the gift card. Usually, this is a good thing – a store that sells iTunes gift cards or sells Apple Store gift cards will let you shop both in-person and online.
However, this is why they are so popular with scammers. These gift cards can quickly be activated and spent – before the victim has a chance to do anything.
In addition, gift cards are pretty much untraceable. If a scammer gets gift cards from a victim, they can easily be resold on a third-party website, or the value can be spent in-person, and the goods resold to make a profit. Cash payments are much more easily traced, due to strict international banking regulations.
Finally, there is pretty much no way to recover money spent on gift cards if you’ve given the information about them away. You can cancel a check or reverse a wire transfer, and you can ask for a chargeback on your credit or debit card if you get scammed – these are all ways you can get your money back.
But for gift cards, you really don’t have much recourse. You can ask the issuing gift card company for help, but it’s really not their problem, and they usually do not offer much help.
Now that we have discussed the reasons criminals like gift cards, let’s talk about the most popular gift card scams for 2018.
Breaking Down The Most Common Gift Card Scams For 2018
While there are some new scams – such as the eBay and Craigslist gift card selling scam – many of these scams are just variations on the age-old phone “phishing” scam. However, modern technology has made phone scammers more convincing than ever before.
Let’s take a look at the most common gift card scams now.
eBay/Craigslist Gift Card Selling Scam
This is a newer scam, and can be done either on eBay or Craigslist. However, Craigslist is a much more common target – because unlike eBay, Craigslist does not really have any policies protecting sellers from chargebacks and scams. Most Craigslist exchanges take place in person, so there’s usually no need for such things.
The scam mainly targets people selling gift cards on Craigslist. A scammer will contact you, and ask that you sell them the gift card without meeting them in person. They will send you a payment – usually using PayPal – to prove that they are willing to pay for the card.
Seems fine, right? You’ve got the money, so you give them the information on the card. Everything’s good!
Not quite. Next, the scammer will cancel the payment and drain the funds from the gift card immediately. Often, this is done with hacked PayPal accounts, so the scammer is not even traceable. You will end up with a reversed or canceled payment, and a drained gift card.
To avoid this, it’s best to avoid selling gift cards on eBay or Craigslist, and turn to legitimate third-party gift card resellers like EJ Gift Cards.
Police Impersonation Scam
In this scam, criminals use Caller ID “Spoofing” to impersonate a police department. “Spoofing” technology often allows scammers to make up fake caller IDs – for example, you might get a call that appears to be your local police department, when in reality it’s somebody thousands of miles away.
There are a few different ways that police impersonators try to scam you. They may say that a relative of yours has been arrested, and needs to post bail, or needs money for legal fees. Often, these scams are done to people who have relatives out-of-state or out-of-the-country, because it’s harder to verify the authenticity of a non-local police department.
Then, they will ask that you give them a certain amount of money in iTunes gift cards. If you refuse, they may threaten you, or say that your loved one is in serious trouble. Often, they will stay on the line with you until you complete the purchase, and give them the gift card numbers. Then they hang up, and you’ll never hear them again.
“Instant Loan” Scam
This scam is usually done to people who have quite a bit of debt, or targets older folks who may be in need of some extra money. A person who is supposed to represent a loan company calls with a great deal on an “instant loan” – often for 0% interest. They tell you that you are prequalified for it – and you just need to pay processing fees and other fees with gift cards.
To most people, this scam is obvious. But to those who are desperate or not familiar with lending practices, it may not be so clear – and you could end up losing quite a bit of money.
Phone “Refund” Scam
This is similar to the “Instant Loan” scam. Consumers may be contacted by someone who claims to represent their phone, cable, or utility company.
Then, the “representative” on the other line will tell you that you are eligible for thousands of dollars – you have been overpaying for your service, or a class-action suit has resulted in the award of damages.
But there’s a catch. Again, you have to pay processing fees – and they will ask for gift cards. They promise a deposit of the cash after the cards have been received. But then, you’ll give the gift cards over to the scammer, and get nothing in return.
“Jury Duty Warrant” Scam
This is similar to the police impersonation scams mentioned above, but with a different twist. The scammer may try to impersonate the police, or the local judicial branch of the government. They will call you, and be very threatening and intimidating.
They will claim that you have a warrant out for your arrest, because you failed to show up or file an exception for jury duty. Because this is a very realistic – and scary – scenario, this is a highly effective scam.
Often, the caller may say that the sheriff’s department is on the way to your home to arrest you, and that you can only avoid this by giving them gift cards. In reality, there are no police coming to your home – and you are just getting scammed.
How Can I Avoid Being Scammed?
How can you avoid being scammed – either on the phone, through your email, or when selling gift cards online? Here are a few of our best tips.
- Stay level-headed and think through the situation – Scammers thrive on confusion and intimidation. They more they can bully you and make you feel scared and frightened, the less likely you are to think through things. This means you’re more likely to fall for the scam.
If you think you’re being scammed, pause. Take a step back from the phone, and a few deep breaths. Then, think about what’s happening – does it make any sense? Why would authorities be asking for gift cards?
- Don’t give away any personal information – Scammers are opportunists, and may ask for information such as Social Security numbers or driver’s license numbers to “confirm your identity.” Don’t give away this information – it could be used for identity theft and further crimes.
- Do not panic if the caller has information about you – This is what convinces many people that a scam is legitimate. Callers often have information about you – like your address, phone number, legal name, employer, and other information – so you might assume they are legitimate.
Just about anyone can get this kind of information with a little bit of research, though. So don’t assume that a caller is legit just because they know some of your personal information.
- If it sounds too good to be true, it is – Is a Craigslist buyer offering the full value – or more than the value – of a gift card? Is a caller offering you free money, or another opportunity that sounds too good to be true?
Well, it probably is – and you’re getting scammed. Ask yourself why a person or company would do what the caller is doing – and whether or not it makes sense. If the offer sounds too good to be true, you are almost certainly being scammed.
- Authorities will never ask for gift cards – This is the biggest sign. If anyone claiming to be from an organization like the IRS, police, judicial office, or any other authority says that you must pay in gift cards, you’re getting scammed. Legitimate government organizations do not get paid in gift cards – ever. It’s a scam, so hang up immediately.
Who Is Most Vulnerable To Gift Card Scams?
You may be a savvy consumer who would not have fallen for any of these scams, but there are many people who are vulnerable to them – so it’s still wise to be in-the-know, and informed. At particular risk are these groups of people:
- The elderly – Elderly folks often do not understand technology and gift cards, and may assume that a caller is legitimate if they know their personal information. There are many cases where elderly individuals have lost thousands of dollars to scammers.
- New gift card sellers – First-time gift card sellers may be scammed on eBay or Craigslist because they don’t know what they are doing, and assume that PayPal payments are not reversible.
- People who are not very tech-savvy – Even younger individuals can be scammed if they do not understand technology. If you don’t know that police caller IDs can be spoofed, for example, you may assume the call is legitimate.
- Individuals with relatives abroad – A less-common variation of the police scam is the “international police” scam. A relative of someone living or visiting a country abroad will be contacted, and told that their loved one is in trouble, and they must pay in gift cards.
Protect Yourself By Understanding These Scams
Gift card scams are an unfortunate fact of life. As long as gift cards remain untraceable and easy to use online and in-person, the only way to prevent scamming is by being aware of common scams, and avoiding them.
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