Katie Galan

Katie Galan

Since their debut in the mid-90s, gift cards have exploded into a multibillion-dollar industry. They offer convenience and ease for gift givers and receivers alike. No more questioning if a gift is the right size or worrying if returning an unwanted gift is offensive.

However, as always, where consumer trends go, scams will follow.

A recent, in-depth BBB study finds reports of scams involving gift cards have increased dramatically in the last few years, generating hundreds of millions of dollars in losses. In 2020, Texans alone reported nearly 100 gift card-related scams, which cost them more than $126,000.

So, how do scammers use gift cards? They could be a part of any type of fraud where payment is requested. The scammer will typically instruct their target to purchase gift cards and send them photos of the number on the back. If you question why they are requesting this specific form of payment, they give you a convincing answer. For example, they might tell you that the company or organization has recently entered a contract with the gift card company.

Gift cards are an appealing form of payment to scammers, because they do not offer the same kinds of protections as a credit card and they cannot be easily traced. If a suspicious caller is asking you to pay them via gift card, remember these tips from your Better Business Bureau to avoid getting scammed:

  • Know the red flags.
    • Remember, a government agency will never call and demand payment or ask you to send money through gift cards. You should also be wary of anyone who tries to convince you gift cards are a safe form of payment. Like cash, they are unrecoverable once sent.
  • Keep your receipt.
    • Keep proof of your purchase, including the receipt and the card itself. If problems arise, this can help you prove the card was paid for.
  • Report it.
    • If you’ve been scammed, submit a report to BBB Scam Tracker or the Federal Trade Commission (FTC).

    To read the full report, visit us at BBB.org.

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    Katie Galan is the regional driector for BBB Serving the Heart of Texas. She can be reached at 844-222-4968, Ext. orkgalan@corpuschristi.bbb.org.

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