The DC Department of Insurance, Securities and Banking (DISB) cautions residents to be on guard against gift card scams.
How Are The Scams Perpetrated?
Gift scams are fraudulent schemes designed to trick individuals into giving away money, personal information, or valuable items under the pretense of receiving a gift or prize. These scams can take various forms—damaged packaging, fraudulent online auctions, dishonest cashiers, fraudulent use of magstripe readers, and fake gift card activation sites. From October 2022 through September 2023, 1,162 District residents were affected by gift card scams, representing $6,310,236 in losses.
Scamming Consumers
- Scammers may scratch the back of the gift card to reveal the PIN, then cover it with a similar silver scratch-off sticker. When the victim purchases the card, the scammer accesses the card online and drains the balance.
- Scammers may cover up gift card barcodes with the barcodes of cards that already have been activated. When consumers buy the cards and load money, the money is deposited on gift cards that scammers have rather than the cards the consumers buy.
- Scammers may offer the victim a gift card for a discounted price of the face value of the card. Victims send funds to the scammer, only to receive a gift card that is either stolen, fake, or already used.
- Dishonest cashiers may activate your gift card and then hand you back an unactivated gift card. They then use the activated gift card themselves or sell it for cash.
- Scammers scan unactivated gift cards with a magstripe reader, which stores the gift card numbers. The scammer then calls customer service with the numbers to learn the gift card’s activation status and remaining balance. If a gift card is still active, the scammer uses the card themselves or sells the number.
Avoid Gift Card Scams
- Avoid buying gift cards from the front of a display rack.
- Check gift cards for physical damage or signs of tampering.
- Learn to spot the warning signs of a phishing email. Be wary of emails with urgent demands, multiple misspellings, and links and attachments—particularly if they come from unfamiliar domains.
- Buy a gift card directly from reputable retailers—Target, Amazon, Google Play, Apple, etc.
- Register your gift card with the retailer (if possible) and keep the receipt. Doing so will help issuers reclaim your stolen balance.
Report Fraud
If you believe you have been the victim of a gift card scam or other financial fraud, contact the DISB Enforcement and Consumer Protection Division at (202) 727-8000. You may also file a report with the Federal Trade Commission (FTC) at reportfraud.ftc.gov or call the FTC Consumer Response Center at (877) 382-4357.