Consumer Alert

Gift cards are for gifts, not payments

The Consumer Protection Unit has seen an increase in scams where the scammers demand payment in the form of gift cards. The Federal Trade Commission warns that “gift cards are for gifts, not payments” and “anybody who demands payment by gift card is always a scammer.”

These scams take many forms. In one of the most common, scammers will contact their target while posing as government agents, often from the Social Security Administration or the IRS. They will tell their victim there is some issue that must be resolved immediately. Often, they say that their victim owes taxes or that their social security number or bank account information has been compromised or used to commit a crime. The scammers then direct their victim to resolve the issue by buying thousands of dollars of gift cards at a local store and reading the payment information on the card to them. In another situation, a website may claim that it sells products but that it only takes payment in the form of gift cards. The website will require that you enter the gift card’s payment information to make a purchase. Scammers may also ask for payment in gift cards as part of any of the other scams described on this website. The bottom line is that if somebody is asking you to pay them with gift cards, they are almost certainly trying to scam you.

Once scammers have the payment information from the gift card, your money is usually impossible to recover. Gift cards may look like credit cards, but they function like cash. Whoever has the payment information can use the money on the card or sell the payment information for cash without any additional verification.

For more information about gift card scams, see the Federal Trade Commission’s webpage.

Consumer Protection Unit
February 2021