Scammers are big fans of gift cards because they are easy to purchase, easy to send to the scammer and impossible to trace to the scammer.  It is not even necessary for the scammer to be in possession of the actual gift card to use it.  Sending the gift card numbers or taking a picture on your phone and transmitting it to the scammer is sufficient for the scammer to use the gift card to buy things that can then be sold and converted into cash.

In many instances the scams involved scammers posing as large companies or government agencies such as the IRS demanding payments.   This is called an “impersonator scam.” It is important to remember that no legitimate company and no government agencies asks for or accepts gift cards as a payment method so anytime you are asked for a payment by gift card, you can be confident it is a scam.

In an interesting development, the FTC noted that Target gift cards were the most popular choice for scammers with scammers asking specifically for Target gift cards in twice as many instances as the next most popular gift card and even when the gift card requested by the scammers was not a Target gift card, the scammers asked their victims to purchase the particular gift cards at a Target store.  Last summer, I told you that four victims of an impersonator scam In Pennsylvania sued Target alleging that Target failed to use its own security algorithms and real-time tracking software to prevent these scams.  The plaintiffs further alleged that Target benefited financially from these scams and did not take proper steps to stop it. Presently the case is still in the early stages of discovery where evidence is gathered by both sides.  As developments in the case occur, I will let you know.

TIPS

Fortunately, scams requiring payment through gift cards are easy to avoid.  Anytime anyone approaches you with a business transaction in which you are asked to pay through gift cards, you can be confident that it is a scam.  The IRS has even had to post on its website that it does not accept gift cards as payments.  An important thing to remember is that gift cards are gifts, they are not used as a payment method for any legitimate transaction so if you are asked to pay for any business transaction through a gift card, you can be sure it is a scam

It would be helpful if more companies that sell gift cards would routinely train their employees to recognize scams and require them to ask their customers when larger gift cards are being purchased as to the reason for purchasing the gift cards.  The FTC has recently created new posters for retailers to put up near where they sell gift cards to warn consumers about gift card related scams.

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