How to Safely Buy Gift Cards and Avoid Scams

Gift cards are a widely adopted and convenient payment method, popular for various occasions, offering flexibility for givers and recipients. However, the widespread use of gift cards has also attracted fraudulent activities, making it important to understand how to acquire and manage them securely. Protecting the value of these cards requires awareness and proactive measures to prevent financial loss.

Where to Purchase Gift Cards Safely

Purchasing gift cards from reliable sources ensures their legitimacy and protects their value. It is advisable to purchase directly from authorized retailers, such as the store whose brand is on the card, or from major grocery and department stores. These reputable establishments, including large chains, generally have secure systems in place to manage gift card sales. Purchasing directly from official websites of these retailers is also a secure option for digital or physical cards.

Conversely, buying gift cards from unofficial resellers, auction sites, or secondary markets carries a higher risk of fraud. Cards from these sources might be invalid, used, or obtained through illicit means, making it difficult to recover funds if an issue arises. For online purchases, verifying that the website uses a secure connection, indicated by “HTTPS” in the URL and a padlock icon, helps protect your financial information. Always ensure the URL is legitimate and not a deceptive imitation.

Inspecting Physical Gift Cards at the Point of Sale

Before purchasing a physical gift card, inspect it for signs of tampering. Look for signs that the packaging may have been opened, such as scratches, peeling, or residue. This suggests someone accessed sensitive information.

Check if the Personal Identification Number (PIN) or card numbers, which should be hidden beneath a scratch-off panel, are exposed or appear to have been tampered with. A missing or altered protective layer over the PIN is a clear warning sign. Additionally, verify that the card numbers printed on the gift card itself match any visible numbers on the packaging. Any discrepancies, or signs of a fake barcode sticker placed over the real one, indicate potential fraud. To reduce risk, consider selecting cards from the middle or back of the display rack, as these are less accessible to individuals who might attempt to tamper with them.

Protecting Your Gift Card After Purchase

After purchase, several steps can help protect your gift card’s value and prevent unauthorized use. If the gift card issuer offers an option to register the card online, doing so can provide a layer of security. Registration can sometimes help in protecting the balance if the card is lost or stolen, potentially allowing for a replacement.

Keeping the purchase receipt is important as it serves as proof of activation and purchase, which may be needed if you encounter issues with the card. Use the gift card promptly to minimize fraud risk. Treat gift cards like cash, storing them securely and avoiding carrying them unnecessarily. Never share gift card numbers or PINs with unknown individuals or in response to unsolicited communications, as this information can be used to drain the card’s balance. Regularly checking the card’s balance through the official website or phone number provided by the issuer helps monitor for any suspicious activity.

Recognizing and Avoiding Common Gift Card Scams

Gift cards are frequently exploited in various scams because they are difficult to trace and quickly converted to cash.

One common tactic involves impersonation scams, where fraudsters pretend to be government agencies, such as the IRS or utility companies, or even tech support from well-known companies. They might claim you owe taxes or that your service will be disconnected, demanding immediate payment via gift cards. Legitimate government entities or businesses will not demand payment using gift cards.

Scammers also impersonate friends or family members in fabricated emergencies, asking for gift cards as a form of urgent financial assistance.

Another prevalent scam is card draining or activation fraud, where criminals tamper with physical gift cards on display in stores. Scammers may record card numbers and PINs, or even place fake barcodes over legitimate ones, then return the cards to the display. Once a consumer purchases and activates such a card, the scammer, who has been monitoring the card, quickly drains the funds before the legitimate buyer can use them.

Phishing scams also target gift card users through fake emails, texts, or websites designed to trick individuals into revealing gift card numbers or PINs. These fraudulent communications might appear as balance check sites or promotional offers.

If you suspect a gift card scam or believe your card has been compromised, immediately report it to the gift card company. Additionally, report the incident to the Federal Trade Commission (FTC) at ReportFraud.ftc.gov, as this helps authorities track and combat these fraudulent activities.