Gift cards are very handy for consumers, businesses and, unfortunately, scam artists.
The Federal Trade Commission's latest data spotlight shows that in the first nine months of 2021, consumers reported losing $148 million in scams where gift cards were used as the form of payment. That amount is more than was reported in all of 2020.
Most popular with scammers is the Target gift card, used to drain about $35 million from consumers' accounts, more than twice as much as any other brand.
To make matters worse, the median amount lost when consumers paid with Target gift cards, $2,500, was higher than any other brand of card, with nearly a third reporting losses of $5,000 or more.
Scammers also instructed consumers to purchase gift cards — regardless of the brand of card — from a Target store more often than any other location, according to the spotlight.
Scammers impersonate companies, government agencies
Nearly 40,000 consumers reported using gift cards to pay a scammer in that time frame, according to the FTC. Most often, the scammers were impersonating large companies or government agencies.
Gift card scams have been growing steadily. Since 2018, both the numbers of consumers filing reports in which gift cards were the form of payment to scammers and the amount they have reported lost have increased steadily. The FTC report also notes that consumers’ median reported loss to scammers when they pay with gift cards has increased from $700 to $1,000.
The FTC has resources for consumers, including information on how to contact gift card companies to try to stop payments to scammers at ftc.gov/giftcards.
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