$228 Million Lost in Gift Card Scams, 73 Million Americans Affected So Far

$228 Million Lost in Gift Card Scams, 73 Million Americans Affected So Far
Cover Image Source: Gift card scams | Pexels | Photo by energepic

The V-Day gifting season, characterized by love and doing something special for the special one, also serves as a prime time for criminals to exploit unsuspecting individuals. Criminals have taken their tactics a step further by incorporating artificial intelligence (AI) into their scams. Exploiting the surge in online shopping and gift-giving activities, scammers are strategically targeting individuals, leaving millions of Americans at risk of falling victim to these fraudulent schemes.

Cover Image Source: Pexels I Photo by: Godisable Jacob
Pexels | Photo by Godisable Jacob

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AI has become a powerful tool for online fraudsters, enabling them to employ advanced techniques such as deepfakes to scam their victims. AI software is being used to mimic voices, create deceptive phishing websites, and even infiltrate legitimate platforms to showcase fraudulent deals and reviews. Social media platforms like Facebook and Instagram have also become breeding grounds for deceptive giveaways and contests crafted to either steal personal information or direct consumers to malicious websites.

Gift card draining, a scheme where scammers pilfer gift card numbers before activation and siphon off the funds, is on the rise. This can occur through the use of skimming devices at retail outlets or by hacking the databases of online retailers, posing a significant threat to consumers' financial security.

Image Source: Photo by Magnus Mueller | Pexels
Photo by Magnus Mueller | Pexels

According to the Better Business Bureau, reports of gift card fraud have grown by 50% compared to the previous year, with online shoppers bearing the brunt of this alarming trend. A recent study further reveals that 73 million Americans, approximately 22% of the U.S. population aged 18 and older, have fallen victim to gift card scammers since 2022. The financial toll on victims is equally shocking, with an estimated $55.8 billion lost to gift card scams, averaging close to $765 per victim.

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Don't be a victim, instead stay informed and follow preventive measures and your will never be scammed|Pexels
Don't be a victim | Pexels

Gift card scams have become increasingly prevalent, and protecting oneself from falling victim to these scams requires awareness and caution. Here are some detailed strategies to avoid gift card scams:

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1. Purchase from Authorized Retailers: Always buy gift cards from authorized and reputable retailers. Avoid obtaining them from online marketplaces, classified ads, or unfamiliar sources.

2. Scrutinize the Packaging: Examine the gift card packaging for any signs of tampering or compromise. Do not purchase if the packaging looks damaged or if the protective coating has been removed.

3. Check Activation Codes: Before making a purchase, verify that the activation code on the back of the card hasn't been scratched off or revealed. Scammers often tamper with these codes to gain access to the funds loaded on the card.

4. Be Skeptical of Unsolicited Requests: If you receive unsolicited messages or calls asking for payment using gift cards, be highly skeptical. Legitimate entities, such as government agencies or utility companies, typically do not request payment through gift cards.

If you suspect you have encountered a gift card scam, immediately report it to the Federal Trade Commission (FTC) and the retailer from which you purchased the card.

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