Walmart saved millions from elder gift card scams

Technology developed by Walmart helped the retail giant identify and freeze nearly $4 million in gift cards that had been bought by thousands of primarily elderly victims at the direction of con artists who duped them, according to court records and the company.

The U.S. Department of Justice, after being notified by Walmart, recently seized that money through a federal court action in Arkansas. Now victims of the frauds can claim the money.

“It was impressive what they were able to do,” a DOJ official said about Walmart’s actions. The official spoke with CNBC on the condition that they not be identified.

The seizure of the swindled gift card funds is good news for older Americans and others who lost money in those schemes — if they become aware that they can claim their swindled money.

But the money that Walmart saved for those victims is just a small fraction of the millions of dollars annually lost in so-called imposter scams that rely on gift card purchases.

And the amount of money obtained by such schemes has spiked in recent years.

In the first nine months of 2021, consumers reported losing $148 million in frauds where gift cards were used to pay scammers, according to Federal Trade Commission data.

In comparison, $114 million was reported lost in gift card frauds for the entirety of 2020, the FTC says.