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Beware of Gift Card Scams This Holiday Season

A gift card can be a thoughtful and generous gift. In fact, consumers spend more than $130 billion on gift cards per year, according to CEB TowerGroup. With that much money involved, they also make for a popular target for fraudsters — especially during the holidays.

“During the holidays, scammers really ramp up their efforts to steal consumers’ money and data,” said John Trewin, President & CEO of United Bank & Trust Company. “It is crucial that all consumers know how to avoid becoming a victim when they head out to do their holiday shopping.”

A relatively new scam that started in 2018 involves thieves copying the card number and PIN of gift cards on display racks at grocery and department stores. The scammer then monitors the card online, waiting for it to be activated and uses it before it can be given to its intended recipient. To avoid becoming a victim of such a scam, the Better Business Bureau recommends the following:

  • Grab gift cards from the back of the rack as scammers are more likely to put the ones they tampered with near the front, where they're more likely to be purchased.
  • Examine the packaging carefully to make sure no one has tampered with it, or that the PIN hasn't been exposed.
  • If possible, register the gift card.
  • Buy gift cards directly from the store rather than from a third party.

Other Gift Card Scams

Scammers use gift cards in several other ways as well, including creating fake websites that allow consumers to check gift card balances. These sites trick you into providing the gift card information. To check gift card balances, consumers should only use the website listed on the back of the card — never third parties.

Another relatively new scam involves a fraudster sending a fake email pretending to be a person’s boss or some other important figure in their lives and asking them for a favor. The favor involves purchasing gift cards. With these scams, it is important to verify the source before taking any action. Never respond to such emails. Call the person or speak to them directly to verify the request is legitimate.

Another popular gift card scam involves a fraudster contacting consumers to inform them they owe money. They will often threaten to arrest their targets if the payment is not made immediately by purchasing a gift card and transferring the card information over the phone. No legitimate company or organization would ever demand payment by gift card. Consumers should hang up immediately and delete any email making these types of demands.

More Information

Contact UBTC at 641-892-4110 or [email protected] to learn more about gift card scams and how to spot them.