Every holiday season, retailers are flooded with consumers looking for the perfect gifts for their loved ones. Some shoppers search for weeks or even months for thoughtful and personal gifts. However, according to research from the National Retail Federation, the most popular items on the average wishlist are gift cards. Purchasing a gift card is a fast and easy way to ensure that your friends and family can get themselves something that they truly want. Although it might seem like the ideal present, there are also some caveats when it comes to gift cards. Criminals use gift cards to trick unsuspecting shoppers, and learning how to spot gift card scams is important for your online safety. 

How Do Gift Card Scams Work?

Before you learn how to spot gift card scams, it’s necessary to learn how they operate. Cases of gift card fraud also referred to as gift card scams have increased in popularity over the past few years. In many cases, scammers will attempt to call, email, or send text messages to potential victims. In these messages, criminals try and convince victims to send gift cards in order to pay off imaginary debts. 

Scammers often use a “believable” debt or fee to persuade their victims into sending them gift cards. The most popular types of false debt include speeding tickets, mortgage or rent payments, and utility bills. Criminals make serious threats against their victims such as foreclosure, jail time, losing power, and more. 

These criminals force their victims to purchase gift cards and send them to the scammer either as a physical card or through an electronic method. Victims can’t prevent this type of social engineering scam, but there are ways to identify it before falling for the scam.

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Most Common Gift Card Scams

Depending on the amount of money they a scammer wants from their victims, they can take several different routes in order to get it. Whether they contact victims through email, phone calls, or text messages, it’s important to look out for these popular gift card scams:

    Bots that track gift cards on retail websites.
  • Scammers impersonating the IRS.
  • Gift card theft by retail employees.
  • Fake prizes, awards, or contests.

These gift card scams can present serious financial problems for victims. In 2021, gift card scams cost Americans an average of $2500 to $3000 for some brands, higher than previous years on record. Learning more about the traditional scams and attacks that cybercriminals use can help you stay secure.

Bot Gift Card Scams

One of the most common ways that criminals try to trick their victims with gift card schemes is by using bots. Bots are programmable software applications that run automated tasks for scammers on the Internet. Cybercriminals use these bots to deplete gift card balances within a short period of time after the initial transaction. Bots can search through online databases linked to popular retailers and look for newly-active gift cards. Scammers will then make purchases and drain the balance on a gift card before the recipient even has a chance to use it. 

Tip: Spend your gift cards right away instead of saving them up for a rainy day.

IRS Gift Card Scams

Scammers frequently use IRS scams to frighten their victims into purchasing gift cards for them. Over the phone or through texts, scammers claim that their victim has unpaid taxes that could result in their arrest. They then instruct their victim to send immediate payment to the scammer by using a gift card. 

Tip: The IRS will never ask for unpaid taxes in the form of a gift card, and they will never contact you through a text or phone call. The IRS only contacts taxpayers through physical letters  

Retail Gift Card Scams

Occasionally, retail employees will scam their customers. When this happens, it usually involves gift cards. A common method is giving an empty gift card to a customer after they purchase one, keeping the loaded card. The employee can then keep the card for themselves or return it in the system, taking the money for themselves. 

Tip: Pay attention to employees when they load or recharge gift cards to prevent theft.  

Fake Prize Scams

The social engineering method behind fake prize scams has been in practice for many years. Unfortunately, scammers have found a great deal of success in convincing older adults to fall for their attacks. Cybercriminals will target victims by telling them that they’ve won a prize, often a lottery, a car, or a trip. To redeem their “prize,” victims are asked to purchase a gift card and then read the card number out loud for the scammer.

Tip: Never speak with a representative who claims to have a prize for you that isn’t from a contest that you remember entering. Never give your personal information to someone over the phone unless you can verify their affiliation with an organization you trust.

How to Prevent Gift Card Scams

Now that you know how to spot gift card scams, you likely want to learn how you can protect yourself and your purchases. Ensuring that your information remains safe from scammers is especially necessary during the holiday season. Cybercriminals can even track certain information with your IP address, giving them access to data that might lead to a malware attack or even fraud.

Some gift card scams are hard to detect immediately since customers sometimes have to wait before their loved ones receive them. Other gift card scams are rooted in social engineering attacks, which you can prevent by keeping your personal information secure.

One great way to keep scammers from compromising your private data is by using a VPN. With a VPN, you can mask your IP address through a server in another location and stop a cybercriminal in their tracks. Plus, if you use a Zero-Log VPN, your activity will never be tracked. That means your activity, data, and transfers are still protected, even in the event of a scam or cyber attack.

Protect Yourself Online with a Reliable VPN

Online shopping can be risky if you don’t protect your device from cybercriminals, bots, and scammers. With the help of a secure Zero-Log VPN, your private information remains secure and hidden from prying eyes. PrivadoVPN brings you reliable encrypted servers in over 44 countries across the globe, making it easy to customize your privacy. Plus, with premium access, you also get access to unlimited monthly VPN data, 10 simultaneous connections on limitless devices, and much more. 

Download PrivadoVPN and start securing your privacy with the push of a button. Get unlimited access to a true Zero-Log VPN for only $4.99 today.

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