Gift Card Scams Increased This Year

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Gift card scams are on the rise—and they may be happening just feet from your place in the checkout line.

In the first nine months of 2021, nearly 40,000 consumers reported losing $148 million in gift card scams, according to a new report from the Federal Trade Commission (FTC). That’s more than what was reported in all of 2020, and may be a mere fraction of the problem as fewer than 5% of gift card scam victims report the crime.

Here’s an example of how a gift card scam is pulled off: You get a phone call from someone who says they’re from a government agency, like the Social Security Administration. They say your bank account will be frozen for an investigation and tell you to buy gift cards to avoid getting arrested.

More and more people are being scammed through gift card schemes—and the victims are losing more money. In 2018, the median amount victims lost to a gift card scammer was $700. This year, it’s $1,000.

Older people are more susceptible to these scams, according to FTC data. Of Americans aged 50-59, 19% of fraud reports involved gift cards or reloadable cards. For Americans age 80 and up, that number jumps to 30% of all fraud reports.

Here’s how to identify a gift card scam and how you can avoid getting duped.