Gift cards are some of the most frequent payments for scammers and are becoming more so each year. Gift cards may be physical or electronic to represent a pre-paid amount that is placed on a card and can be exchanged for goods and services. In this article, you will learn how to identify and Gift Card Scams and How to Identify Them.
It never crosses your mind that you will be the one to fall prey to the gimmicks of scammers, especially those involving payment using gift cards. Until you are scammed, that is. We must learn that there are thousands of scams every day. It is a numbers game for the scammers.
Fraud losses are over 10 billion dollars a year, the Federal Trade Commission states. Scammers make more than some legitimate businesses. They’ve become experts at some advanced techniques of stealing your money from you. The most effective way to combat them is to be able to identify them.
Why Gift Cards Are Used by Scammers
Gift cards are the preferred payment for scammers and are becoming more popular every year. Gift cards can either be online or physical in the sense that they can be a pre-paid amount that is put up in a card and used to buy goods and services.
Open-looped gift cards can be re-loaded multiple times and used in many stores. They are also typically issued by banks and other lending institutions. They are not the ones that are normally used by fraudsters.
Closed-looped gift cards are the online scammers’ favorite payment method. They contain a predetermined amount of money that the victim pays, and the scammer gets to use them in a particular store. There are various gift cards like Amazon, Google Play, Xbox stores, Walmart, etc.
The gift cards are the scammers’ choice because it is difficult to track them. Governments can track bank transfers and most other types of payments to see who the final recipient is. Gift cards lack such official protocols.
That is the reason why they also cannot be recovered. When you give away a gift card to someone, money is gone for good. Though the store may have information on the buyer of a gift card, majority of the spammers operate fake accounts under other pseudonyms. Amounts in gift cards usually mean nothing for anybody to bother to do anything with them.
Where Are Gift Cards Used Typically?
The obvious answer is, naturally, gifts. When you do not know what to give to a friend or relative, the gift card can relieve that tension. They are also widely utilized as a motivational device by stores just to make consumers buy more items. It is also an effective way of compensating agitated customers for their time.
Gift cards are also an acceptable choice to be paid for remote online work. For example, legitimate gift card surveys offer cash in this way to avoid the inconvenience of money transfer fees and taxes. It’s a win-win situation for everyone. Users receive money that can be spent in real stores, and the platform does not need to handle international payment infrastructures.
But the difference from online scams is that rather than gift cards being sent to you, you will have to buy them. The only real situations where you buy gift cards are when you buy them for yourself, your friends, or for an employee who works for you.
How Do Gift Card Scams Work?
As with all scams, one-gift card scams start with the initial contact. It could be a text, an email, or social media contact. The second is usually to lure the victim in so that it will trust them and then, thirdly, to come up with a way of asking for money.
The particular reason the scammer is asking for your money depends on the scam. Usually, it’s the most glaringly apparent red flag point, as the scammer will have to explain not just why he is asking for money but also why he is asking for payment in the form of gift cards instead of something else.
Tech support scams
The most common type of this scam starts with a simple phone call. Someone will usually pose as an agent for one of these huge tech companies, such as Microsoft or Apple. He will then tell you that there is something wrong with your computer and request remote access.
Now, in some cases, there is already a virus or malware of a different kind already installed on the victim’s machine. Then no remote access is necessary. The scammer is then free to request payment immediately. In some cases, remote access creates problems that do not exist.
It could involve placing some hardware in your system or modifying some OS settings to give you the illusion that there is something wrong. Then he’ll bill you for fixing them and will hold your PC for ransom until fixed.
Romance scams
These scams usually occur on social media and dating sites. Scammers look for vulnerable victims, trying to get to know them and see if it will be worth stealing money from them.
The key for the scammer here is to form a romantic bond with the victim. In many cases, even real models are used to make video calls on victims and form an impression that there is really a person in love.
Eventually, the scammer will start to ask the victim for money. Typically, it’s some form of purported emergency or lucrative business opportunity that requires an upfront payment.
Gift cards are used here very frequently to justify people paying a romantic partner’s bills. Occasionally, it’s just claimed that it’s to avoid taxes or bank charges.
Lottery prize scams
These scams spread mostly via spam messages. The victim gets a message that he has won a prize, but to get it, he has to pay some advance expenses. This scam is successful because it appeals to the psychological urge to win something that everyone has.
To make it more efficient, fraudsters create an illusion of urgency as if you will not receive your winnings unless you pay within time. In most cases, such frauds ask you to buy gift cards in order to win them.
Conclusion
Gift cards are not utilized by scammers alone, but they are anonymous and non-returnable, and this is a great method of payment to be employed to swindle victims. Education on gift cards and their associated scams will make you less susceptible to them.
