Consumer Corner Column

Consumer Corner: ‘Pay by gift card’ is red flag for scams

Release Date: Aug 29, 2018

Gift cards can be useful tools to allow a gift-receiver to choose his or her own gift. In recent years, these cards have become readily available, with racks of cards appearing in grocery stores, pharmacies and even gas stations. Unfortunately, we’ve also seen scammers try to take advantage of the convenience of buying a gift card to make it the currency of choice when ripping people off.

We often receive reports in our office of a scam artist – usually by telephone – asking people to go to a store, purchase a gift card, and then read the numbers on the card to them. The stories that scam artists tell for the reason they need the money may vary, but it’s usually one of the classics. A grandchild in trouble, the IRS saying you owe back taxes or a tech support person wanting to help you fix your computer are some of the most frequently used stories. No matter what the story is, the common thread will be that the scammer asks for payment by gift card. The scam artist could ask for any form of gift card, but the most common ones are for iTunes or Amazon because the scam artist can most easily resell these cards for cash.

States and the federal government have recently cracked down on the wire transfer service companies, which for years were the scam artists’ preferred method for getting the money to their untraceable, offshore bank accounts. At the demand of the federal government and state attorneys general, the wire companies have instituted additional safeguards that help protect consumers against wiring money to scam artists. So, now the scammers are turning to another method of untraceable funds through the gift card market. Once you’ve read those numbers off to the scam artist on the other end, the bad guy is immediately reselling that gift card for cash on the black market. The money is gone, probably overseas, and there’s little chance of being able to get it back.

While our best advice remains not to answer your phone when it’s someone you don’t know – and always be skeptical of the person’s story on the other end of the line – if they ask for you to send money by purchasing a gift card, you should know immediately that it’s a scam. Remember, gift cards are meant for giving as gifts, not as a form of currency.

If you become the victim of a gift card scam, or any other scam or rip-off, you can file a complaint with our Consumer Protection Division online at, or by calling (800) 432-2310.