Thanks to gift card scams, it’s beginning to look a lot more shady this holiday season – Screen Shot
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Thanks to gift card scams, it’s beginning to look a lot more shady this holiday season

It’s that time of the year again when Google witnesses a surge in traffic for the search term ‘last-minute Christmas gifts’. While some of us started sourcing our Christmas presents the morning after Halloween, last-minute gifters are a different breed—navigating present guides and summoning their last three brain cells to remember whose name they landed for secret Santa at work mere hours before the exchange.

With procrastination comes a plethora of life-saving options including candles, hampers, bouquets, subscription boxes… and the infamous gift cards—along with all their blaring red flags that are virtually impossible to trace, making it a scammer’s love language.

The rise and rise of gift cards

Ever since their large-scale introduction by luxury retailer Neiman Marcus in late 1994, gift cards (also known as gift certificates, gift vouchers, and gift tokens) have had a toxic affair with the holiday season.

Once considered as little plastic bundles of joy, gift cards evolved into a safe and versatile option to hand to all the ‘it girls’ in your life. Later subjected to cringe culture, they are now witnessing a revival as inflation and the cost of living crisis continue to wreak havoc on holiday budgets—in turn, subjecting consumers to a complete reevaluation of priorities close to Christmas.

According to research from National Retail Federation (NRF) and Prosper Insights & Analytics, gift cards are the preferred medium of presents this Christmas for the 16th year in a row. As noted by Jay Jaffin, Global Chief Marketing Officer for Blackhawk Network, consumers are also predicted to purchase an average of 36 gift cards—both physical and digital—during the holiday season.

“That number might sound big, but think about the things we do over the holidays,” Jaffin said in an interview with PaymentsJournal. “You might buy your kid’s teachers each a $20 gift card. There are all the people we interact with on a day-to-day basis that we want to show a small token of appreciation to.”

As per data collected by Blackhawk Network, gift card spending represents about half of the total holiday budget—with 58 per cent of consumers planning to change their shopping behaviour altogether, seeking to use more discounts and promotions. It’s also worth noting that gen Zers, in particular, are hoping to increase their gift card spending by 57 per cent in 2022, from $185 to $290.

The virtual Grinch that keeps on grinching

Today, gift cards have evolved into a huge global market projected to hit a whopping $2 trillion by 2027. It’s therefore safe to say that last-minute gifters love them, retailers adore them… and scammers worldwide swindle the heck out of them.

The boom of gift cards hasn’t escaped the notice of cybercriminals and online fraudsters, who have developed a whole underground industry focused on the plastic present. In the first nine months of 2021, nearly 40,000 consumers reported losing $148 million in gift card scams. What’s worse is that this number may be a mere fraction of the problem as less than 5 per cent of gift card scam victims actually report the crime.

Now, if you’ve experienced any sort of scams in the past, you’ll know how helpless the entire ordeal makes you feel. While you regret losing your hard-earned cash, others will typically blame you for falling for dodgy schemes. And the worst part about it all is that the scam sounds stupider every single time you explain it to someone.

At the end of the day, you’re eventually forced to “move on” and “learn from your mistakes” while dousing yourself in self-doubt whenever an unknown number pops up on your phone screen. But don’t worry just yet. This holiday season, I’ve got you covered in the gift card end of things. From a shocking range of tactics deployed by fraudsters to reporting scams to the right authorities, here’s everything you need to know about the tiny plastic cards that are here to stay for the foreseeable future:

1. Why do scammers love gift cards?

Gift cards are essentially popular among fraudsters for the same reason why they’re popular among consumers: they’re a near-ubiquitous store of money that can be used to buy a huge range of goods and services.

More specifically, scammers love gift cards given the fact that they’re easy for consumers to purchase, both online and in-store. Most retailers and big-name brands now offer some form of gift card and there are fewer protections in this case than if the buyers were using regular payment cards. Just like cash, once the balance on the card is gone, it’s gone. Lastly, there’s no need for a scammer to provide a bank account for payment here—instead, they just need the gift card PIN or code.

According to the Federal Trade Commission (FTC), gift card scams often feature one retailer (drum roll, please): Target.

The agency noted that Target gift cards were reported twice as much as any other gift card brand. 30 per cent of people who obtained these cards for a scammer also said that they’ve lost $5,000 or more.

“Unfortunately, gift card scams are a persistent issue across the retail industry,” Target said in its statement. “Target takes these crimes extremely seriously and we use a multi-layered, comprehensive approach to mitigate fraud that includes technology, team member training, and collaboration with law enforcement.”

2. How are gift card scams carried out?

Though scammers can be tricky and pretty persuasive, here are some tactics and warning signs you should keep an eye out for:

The cheugy method

One of the most basic tricks in the book is when thieves go to physical stores and scratch off the film strip on the back of gift cards to get the PIN—which they cover back up with easy-to-obtain replacement stickers.

The scammer then enters the card numbers and PINs into a computer program that repeatedly checks the retailer’s website and lets them know when someone buys and loads a compromised card. The crooks can then spend or transfer the money on the card, or cash it in before the buyer or gift recipient even has a chance to use it. Smooth criminal, indeed.

The phoney giveaway

In this case, you get an email or text, supposedly from a familiar store or organisation saying you’ve won a gift card. To claim it, you just need to provide contact information, click through to a website, or answer a few survey questions, often about your finances or health. Nothing sus so far, right?

Alas! The scammer then instals malware on your computer, uses your data for identity theft, or sells it to marketers—resulting in a barrage of spam emails about loan opportunities or miracle cures.

The threatening ‘government official’ who’s a sucker for gift cards

Here, scammers will masquerade as a legit government official, a representative of a company you do business with, or even a loved one in trouble. They’ll typically threaten you by claiming that you owe unpaid taxes or outstanding bill payments and stress the urgency of payment. This is classic social engineering designed to force the victims into hurrying their decision-making.

But wait, there’s a catch: the payment can only be made through gift cards—with the scammers usually specifying the type of card they want to be used for the payment. According to the FTC, no real business or government will require payment via gift card.

Bots steal your balance

Sometimes the bad guys don’t screw around and go straight to the source by hunting digitally for a record of your gift card with the issuer.

How do they do this, you ask? By using automated bots to probe bank-end IT systems at retailers and other organisations for details on card balances and card numbers. With this information, they can use the card as if they were the official cardholder.

3. How to protect yourself from gift card scams

First off, hang up on fake callers instead of entertaining them just to see “how far they would take the joke.” Believe me, as a gen Zer, you may feel like you know your way around cyberspace, but no phishing, vishing, or scam attempt is worth your bank account or your mental health. Delete all unsolicited email or text messages offering you a gift card and avoid giving personal information to anyone in exchange for the same.


Works like a charm… #fyp

♬ msnewslady Jeannette Reyes - JENNIE HUFF

Secondly, given how in-store gift cards can be easily tampered with, it’s best to purchase the ones you plan to use yourself or give as presents directly from the business that issues them. This is even more preferable if done online.

If you’re looking to buy a gift card from a physical store, make sure to look out for any sign of tampering. It’s safer to buy from places that keep gift cards behind the counter or if they’re sold on racks in well-sealed packaging.

It’s always recommended to register your card with the retailer, if that option is offered. This makes it easier to track and quickly report any issues. Lastly, immediately contact the retailer that issued the gift card if you’ve used it to pay a suspected scammer. If money remains on the card, you might just be able to get it back.

At the end of the day, remember that fraudsters all across the world are coming up with new ways to swindle your cash and personal data as we speak. So while the tips offered above don’t make a complete handbook on how to deal with scammers, it’s definitely a good place to start.

And please, for the love of Mariah Carey, don’t even think of handing a “crypto gift card” to someone this Christmas. Because chances are that even the scammers involved in the business wouldn’t be interested in swindling someone with such poor financial choices and gift-giving etiquette.

Instagram fake product scams: How to detect and prevent fraud

What are Instagram fake product scams?

There are plenty of scams out there but a lot of people assume that on Instagram they are safe from phishing scams and the like. Because of the fact that people feel like Instagram is a very official and moderated platform, it is easy to get sucked in by the scammers.

What is the strategy of fake brand accounts?

Fake brand accounts mimic the look of a legitimate brand account and market ‘products’ via their own profile or by using the sponsored posts section of Instagram. Effectively, they are trying to sell you a product that is either not what it seems, or it simply never comes at all.


What steps do these scammers take to draw people in? What are the methods of the fake brand accounts to look out for?

Promises about exclusive discounts

A lot of fake brand accounts will offer exclusive discounts or huge savings that you would not get on the high street. They are able to do this because they are either not going to send a product to you at all or because any product they do send will be counterfeit. They might have a small print to say that the product is a replica, but a lot of the Instagram accounts that will scam you are ‘burner’ accounts so they don’t care if they get banned in a week or two, as long as they make sales.

Phishing emails

Some ads might request that you make your own profile on their site, or of course, they will ask you to sign up to place an order. This means that your details can be vulnerable. The scammers can collect details they don’t really need, and use these to try and scam you in other ways such as phishing scams which compromise your logins for other accounts.

Things to watch out for

How can you ensure that you are alert and vigilant and don’t get scammed yourself? What do you need to watch out for when you see an advertisement and think it might be a potential scam? How do you even spot a post that might not be trustworthy?

How to avoid fake brand accounts

What are the best ways to avoid fake brand accounts? You should always do a little bit of research before buying something, especially if it seems like you are getting an amazing deal. Remember the rule that if it seems too good to be true, it probably is.

Record searches

You can check public records in order to find fake brand accounts. You can use keyword public records searches to find out who is behind the social media accounts, searching by email addresses, keywords and any other details you have. If the name and branding of the Instagram account itself looks untrustworthy and unprofessional then this could be another sign something isn’t quite right.

Don’t share specific location data

Don’t compromise your location as some scammers can use this against you, and people who are involved in identity fraud can get a bigger picture from the location data. NBC news estimates that there are 65 million posts fraudulently posted each and every month on Instagram. Many of these are just trying to make a quick buck but some might have other plans to steal your information.

Be careful with personal details

Your personal details should be protected at all costs. All too often, people freely and simply throw out their personal details on whatever site people request them. This can be extremely dangerous. Though there are methods in place to try and safeguard people, not all websites abide by them, and scammers definitely won’t protect your personal details, instead, they may use them against you for identity fraud or other scams.

If you use the same password for an account you have made to try and get an Instagram discount, the scammers can often use these details to try and access other accounts you have made, and this can lead to them getting more than just a few dollars that you are spending on a discounted product.

Scammed on Instagram: What to do next?

What are your next steps if you have been scammed?

Report the scam

You can report the scam to ensure that it doesn’t happen to others, either through public records sites, Instagram’s own report function or your country’s government’s website, which allows you to report all sorts of different scams that might be dangerous to others. Follow this link to make a report in the US.

Claim the money back (if you can)

If you have paid on a credit card then you might be able to file a complaint and try and get your money back. If you used Paypal, a similar claim function exists but for this reason, a lot of scammers won’t accept Paypal.