The Anatomy of a Gift Card Scam

It’s the most wonderful time of the year. Yes, indeed, but be careful, it’s also a season for holiday scams wherein fraudsters are looking for the opportune moment to scam you by indulging you in buying a gift card for quick cash. Let’s take a look at the anatomy of a Gift card Scam.

Gift cards are one of the most popular items on this wish list during the holiday season. The National Retail Federation estimates about 59% of the consumers surveyed would want to purchase a gift card this holiday season. On average, gift card spending has reached close to 30 billion dollars this holiday season, which makes gift cards a very lucrative item for the scammers and thieves looking to steal money and your hard-earned cash. One of the primary reasons gift card fraud is on the rise is although they are much more anonymous than credit or a debit card. The result of a gift card scam usually remains the same– the recipient losing their funds. Let’s take a close look at the techniques scammers and fraudsters use to make money using gift cards.



Take a look at the video channel below. YouTube user KITBOGA highlights just some of the many ways where tech scammers, IRS scammers, and other types of fraudsters take advantage of people to scam them out of their valuable hard-earned money. Scammers use scare tactics and pose themselves from authoritative groups like the IRS (Internal Revenue Service) and large tech companies like Microsoft and Amazon and lure recipients by making them believe that there is some error say for example in their tax return, and they owe them money else they will be arrested for committing fraud. They push the bounds of human emotions to the point where people start to make-believe in their story and start adhering to their demands which usually require recipients to go to a store and purchase a gift card such as Google play cards, Sephora gift cards, Best Buy and or Target gift cards to pay them back.

As a takeaway, if you encounter any person or a phone number that you find suspicious, that encourages you to use gift cards as a mode of payment for any outstanding balance that you owe to them. Please take that as a red flag to not provide anyone with and personal financial details to help benefit them from stealing from you.

Furthermore, IRS (Internal Revenue Service) has a dedicated webpage available that cautions taxpayers against gift card scams. Check out the video below from the KITBOGA channel on how an IRS scammer screams at an old granny to steal $300 from her.


With Black Friday and Cyber, Monday around the corner retails stores often offer consumers gift cards to be used in their store when purchasing an item as part of their Black Friday sales and promotions. Usually, users who don’t have any use of the gift cards sell the cards on legitimate websites to cash out to be used anywhere. Scammers often take advantage of such situations to help make money by stealing the gift card numbers and leaving consumers out of the money. Let’s take a look at how the scam works to avoid becoming a victim.

Scammers place ads on websites and buy/sell apps such as Craigslist, Letgo app, OfferUp app stating they will be paying a high value for their unused gift cards. The buyer would then ask the seller of the gift card to engage in a conference call requesting them to key in the numbers on the back of their gift card to confirm the value of the gift card. While the seller is unaware, the buyer records the sellers’ call, including the touchtone entered by the seller. The buyer then uses a DTFM decoder – Dual-tone multi-frequency signaling to help convert the tones and extract the gift card number and the pin code associated with it once the buyer or the scammer has this information, its easy cash within a matter of minutes for the buyer.

Bottom line: Always be conscientious and never provide any person the gift card number of pin code verbally or by entering it in a dial pad of the phone. A simple online search will help you find reputable websites backed with genuine consumer reviews to help sell your unused gift cards to help recover your money.


Although significant stores and retailers tend to cover their gift cards well, there are times where due to an oversight on the part the retailers, scammers remove the gift card from the display, record the number on the gift card, and put them back. Then they wait for a consumer to load a cash balance on the gift card by continually monitoring the gift card balance. As soon as the gift card has a balance, the scammer uses the gift card online and purchases it for themselves. Let’s take a look at some of the ways to avoid the gift card scam.

When purchasing a gift card from a store, as a best practice, scan the sore and pick a gift card that is more securely placed especially the ones that are not easily accessible. You can always take the initiative to reach out to the in-store representative to help assist you with a gift card purchase to be more secure.


If you think you have been scammed or are being scammed, contact the local authorities and notify them immediately about the scam. Do not under any circumstance provide any personal financial information to the potential scammer, instead hang up the phone and inform the local authorities. More importantly, stay mentally and emotionally healthy. Don’t feel afraid, the people that scam you are well adept at their work and will try their level best to steal from you but always remember good intent still prevails at the end of the day.

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Hello!! My name is Sachin Bhargava and I am a financial professional with many years of banking experience. I am a numbers guy by day and tech enthusiast by night. SaveProfits is place to find ways to help people make and save money. I would like for my readers to use SaveProfits as a source to create and manage wealth to achieve their financial goals. In my free time, I enjoy watching cooking videos, (I am a foodie at heart) gaming, being a tech enthusiast and as always crunching number while exploring tech deals that help me SaveProfits. Thank you for visiting my blog. Now let’s get rolling and start to SaveProfits…)

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