How How to Identify Gift Card Scams

Wednesday, March 10, 2021

Someone looking through a magnifying glass

With the steady rise in popularity and pervasiveness of gift cards, scammers sometimes use them in one way or another to aid their fraudulent schemes. Although Gift Card Warehouse clients report no such occurrences, we thought it safe to spread awareness. Proper knowledge makes all the difference in these situations so share this information with your network. Prevention is key, after all! By banding as a community, we can push back against fraudsters with ill intentions.

Most Common of Scam

According to the Canadian Anti-Fraud Centre the most common type of fraud involving gift cards has scammers instruct individuals to purchase prepaid gift cards (or use ones they already possess) and send them the gift card numbers and PINs. These communications can occur through email, mail, telephone, social media or website pop-ups.

Prizes

Scammers contact individuals to tell them they’ve won, or have a chance at winning, a prize or lottery. Scammers then demand gift card information to claim winnings, but nothing is ever received.

Spear Phishing

These scams involve fraudsters pretending to be from legitimate sources to convince businesses or individuals to transfer funds. They leverage relationships between the person and the sender.

When targeting a company, scammers contact staff and appear to be the owner, the president or another high-ranking manager. They claim the boss is working offsite and needs help to buy or use gift cards for employee rewards.

When targeting individuals, scammers contact people from a compromised source seeming to be a known contact, such as a family member or friend. They claim that the sender requires assistance to buy or use gift cards for birthdays or something else.

Protection from Scams

Authorities, such as the Canadian Anti-Fraud Centre or police services, recommend the following best practices to protect yourself:

  • If you receive communications instructing you to buy gift cards or use your own, this could be a scam. Don’t engage or refuse.
  • If you are told to scratch the backside of gift cards and send codes, this is most likely a scam. Do not proceed.
  • Remember that scammers can "spoof" phone numbers, emails, social media accounts, etc. It may appear that the originator is someone you know, your financial institution, the Canada Revenue Agency, or your local police service, when it is not.
  • Talk to someone you trust or do your research before sharing information of this nature. Often, once you tell your story or look into it, you will recognize that it doesn’t sound right. This may help to prevent you from falling victim to a scam.
  • Remember that gift cards are not typically a form of currency to pay outstanding debts, taxes, etc.
  • Protect your computer or online accounts.
  • When buying gift cards, only use secure platforms and deal with known distributors such as Gift Card Warehouse. Gift cards should be stored in a secure facility, dedicated and trained support staff should be available to address concerns, and a robust procurement policy should be in place to screen purchasers.

As always, Gift Card Warehouse strives to be a solid resource in the industry and remains committed to the protection and well-being of the community. Should you have questions relating to these scams, contact us. Inform your employees, clients and partners of this trend to make sure everyone is aware

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