In many ways, gift cards usher in a win-win era. Provide consumers with better ways to give (and get) gifts, and increase sales for retailers. But leave the good stuff to the liars. According to the Federal Trade Commission Data Spotlight, gift cards are now a favorite payment method for many fraudsters. For years, the Federal Trade Commission has been warning consumers to beware of gift card scammers. There’s now a new Stop Gift Card Fraud Toolkit to help retailers do their part to prevent this form of fraud.
In the past, say four or five years ago, wire transfers were a favorite method for scammers. Many people still use this method, but according to Data Spotlight, people have lost nearly $245 million to gift card scams since 2018, with a median individual loss of $840.
A scam may start with a phone call from an imposter claiming to be from the IRS or other government agency and demanding immediate payment. Almost half of those who reported losing money to this form of fraud paid with gift cards. According to Data Spotlight, nearly 45% of people who lost money to family emergency scams—where callers claim a relative needs money for medical care, bail, etc.—were paid with gift cards. Gift cards are reportedly used as a form of payment in approximately one-third of tech support and business impersonation scams. The sales pitch becomes so smooth that scammers may direct people to specific retailers and may even stay in contact with them, walking them step-by-step through the purchasing process.
The message to consumers is clear: Gift cards are for gifting, not payment. If someone you do not know asks for payment with a gift card, stop and report it to the FTC at ReportFraud.ftc.gov. If the person has used a gift card to pay a scammer, report it to the gift card company immediately and request a refund. The Federal Trade Commission has compiled a list of contact phone numbers to make processing easier. (And report to the Federal Trade Commission.)
Why should retailers join the fight against gift card scams? Because you care about your customers and want to help protect them from this form of fraud. If you work for a local or national retailer, a retailer association, or a state or local law enforcement agency, or you are a public-spirited business person interested in sharing information in the community, please join us using the downloadable resources at the link below : Stop Gift Card Scam Kit.
What’s in the kit?
- Carousel or display stand sign. The toolkit includes downloadable logos that can be posted wherever gift cards are sold. Some include the option to add a company logo. (These signs are available in English and Spanish.)
- Cash register card. Laminate double-sided cashier cards and place them on the register to alert customers purchasing gift cards how to spot fraud.
- Bookmarks. Place bookmarks at checkout as customer giveaways or distribute them in your community.
- sticker. This sticker is sized to fit in a cash register, retail window or checkout stand to alert people to gift card scams.
- Share on social media. Alert consumers about gift card scams through visuals, articles, and videos that can be shared through your company’s social media or your own social media.
Don’t stand by while scammers scam your customers. Download and use the Stop Gift Card Scam Toolkit to help maintain consumer confidence.
