Gift Card Scams and Frauds to Watch Out For

by Emily Guy Birken

Everybody loves a gift card: gift-givers searching for the perfect present, gift-recipients who get to pick out exactly what they want, and scammers—who are always looking for a way to make a shady buck.

Gift Card ScamsFor the most part, purchasing a gift card is perfectly safe for you and for the merchant. However, there are a few types of gift card frauds that can burn the average holiday shopper. Here are the most common gift card scams and frauds, and what you need to do in order to avoid them:

Gift Card Scams:

1. Purchasing a gift card from an online auction site can be risky. Dishonest sellers can pass off used, fraudulent, or counterfeit gift cards as the real deal. On one end are the sellers who will overstate the value of their cards—selling you a $100 Best Buy gift card for $80, only for you to find that it has less than $50 left on the card. On the other end are out-and-out scammers who will use stolen credit cards to purchase gift cards which they then sell online or for cash. Once the theft of the original credit card is reported, the gift card will be voided, leaving the buyer with a useless piece of plastic.

If you are interested in purchasing discount gift cards online, make sure you go through a reputable gift card auction site like CardCash, Gift Card Rescue, Gift Card Granny, or Cardpool. These sites allow user to buy and sell gift cards and they offer buyer protection policies, whereas purchasing a cheap gift card from Craigslist will offer you no such policies.

2. Gift cards that come in completely sealed packages are vulnerable to thievery. Scammers can carefully open these packages and replace the unused gift card with a used, worthless one. That means that when a legitimate buyer purchases the card, the card the thief has stolen is the one that will be activated. Often, the switch won’t be discovered until the gift recipient tries to use the card.

To avoid this issue, make sure that you examine the card and your receipt to see that card number matches the activation information on your receipt. It’s also a good idea to keep your receipt, as some stores can track where the card was purchased, activated, and used.

3. You register a gift card and it doesn’t work a few days later. Some scammers will write down the card numbers of gift cards that are offered on public display racks, and will call the balance inquiry number after a few days to see how much money they have “left” on their card. While they cannot use these cards in store, they can still use the unique card number for online shopping.

It’s important to note that while this particular scam has been reported by a few retail and law enforcement groups, it is not considered a serious threat. even has a page regarding this scam, which concludes that it is a possible risk, but not a huge one.

If you are concerned about this type of scam, you can make sure to ask a cashier or clerk to get you a gift card from behind the counter, rather than choosing one off the rack.

The Bottom Line

Don’t let scammers ruin your holiday. If an online gift card deal seems too good to be true, it probably is. And when you are making gift card purchases in the store, keeping your receipt and taking some reasonable precautions will help make sure your holiday is both merry and bright.

Published or updated May 16, 2013.
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{ 2 comments… read them below or add one }

1 Grayson @ Debt Roundup

Gift cards are one of the easier scams that happen all of the time. It is nice to see you spell out great ways to make sure you are not getting screwed by an unscrupulous scammer!


2 BillyBob

You missed the biggest one of all:

You buy a used gift card from GCGranny, et al. and it shows a balance when you get it. If the site, however, has a 45-day guarantee, on day 46 the scammer checks for any remaining balance and immediately uses it should there be one.

Another version of this is simplyfor the scammer to wait a few days after dumping it on a trading site and then to use it immediately online. Others go so far as to try to duplicate the strip information — I have heard this one for gas cards.


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