#Get Ready for Gift Card Scams This Holiday Season

The IRS is warning consumers about an uptick in gift card scams, in which scammers pose as a government agent or a bill collector and ask you to pay for a made-up charge with a gift card. Just remember—anyone who insists that you pay by gift card is a scammer.

How the scam works

Scammers most commonly impersonate the IRS and will ask you for gift cards over the phone. The FTC highlights other ways imposters might ask you for gift cards:

• As callers pretending to be from a utility company, saying they’ll cut off your power or water if you don’t pay a bill. They will then suggest a gift card for payment.
• As sellers on online auction sites asking for gift cards to “buy” big items like cars, motorcycles, boats, RVs, tractors and electronics
• As someone posing as a service member to get your sympathy, trying to sell you something quickly before deployment
• As callers saying you’ve won a so-called prize but need you to pay administrative fees or some other charge with a gift card
• As someone who buys something from you online, then sends a check for more than the purchase price and asks you to give them the difference on a gift card. (The check will turn out to be fake)

These scams can find you through text messages, email, or through social media. In some cases, someone close to you like a family member might have had their email hacked and a scammer will use their personal information to convince you to send them gift cards.

Whatever the scenario, the scammer will instruct you to buy gift cards from various stores (usually Walmart, Target, Walgreens, or CVS), then ask you to provide the gift card number and PIN. These scammers are almost always pushy, and they’ll insist that you provide them with gift cards urgently under false pretenses.

Why gift cards?

Gift cards can’t be traced, and they can be sold for money. Once the scammer gets your gift card number and a PIN they’ll have access to the cash on your card.

If you paid a scammer with a gift card

If you think you’ve paid a scammer with a gift card, immediately contact the company, tell them what happened, and ask for a refund or replacement of your gift card (the sooner you do this, the better). This might not always work, but it’s worth a shot.

Make sure you report your fraud to the FTC, through the site or by calling toll-free: 1-877-FTC-HELP. And report the scam to your state Attorney General (visit naag.org for a list of state offices).