Have you ever noticed that some scammers want their victims to send over a gift card instead of cold, hard cash? It may seem like an odd choice at first, but asking for a gift card is in the best interests of a scammer who wants to get people's money safely and discreetly.
Here's why hackers are so obsessed with gift cards—and why it's a dead giveaway that they're trying to scam you.
Why Do Hackers Ask for Gift Cards?
As you might have guessed, the scammers aren't trying to collect gift cards to send on Mother's Day. Instead, they're asking for gift cards because it's the quickest and easiest way for them to steal money from you.
It may seem strange at first: after all, why don't the scammers ask you to wire money to them? Let's take some time to break down what happens when you wire money.
To receive wired money, a scammer needs a legitimate financial account for you to pay into. Fortunately, it can be tough to set up an account these days without entering your personal information. If a scammer did do this, it wouldn't take long until their scams bring the police right to their front door.
Not only that, but it can be a little tricky to send money over.
Let's say a scammer wants to take money from someone through a phone scam. The hacker will need to tell the victim their account numbers and sort codes, and have them enter the details on their side. If the victim encounters issues or doesn't know how to wire money, it can delay the scammer from getting paid.
Now, let's compare this to gift cards. Do gift cards need a secure financial account to redeem? No, you just need to make an account with the website and redeem the code.
Also, getting the victim to send the gift card over the phone is easy. Instead of relaying banking codes and setting up a transfer, the victim just needs to scratch off the silver protector and tell the scammer the gift card's code over the phone.
As such, gift cards are quick, easy to harvest, and leave very little in terms of a paper trail to tie the scam to the scammer. That's why you see scammers ask for gift cards instead of money.
What Do Scammers Do With Gift Cards?
Once a scammer gets a hold of a gift card, they may choose to spend it on products for themselves. However, there are ways for a scammer to launder the gift cards for real money.
Firstly, the scammer can sell the gift card for a lower value than what's printed on the front. For instance, they can choose to sell a $100 gift card for $80. The scammer doesn't lose out on any money because they didn't spend anything on it in the first place. Meanwhile, the low price encourages black market shoppers to buy the card.
This trick works best for scammers who steal credit and debit cards, as they can use the stolen funds to buy gift cards to sell online. However, if the scam happened over the phone, the victim technically still has control over the gift card. If the victim redeems the code before the scammer can sell it, the scammer will have an angry buyer on their hands.
As such, it's more likely that the scammer will redeem the gift code before it's used, then sell the result. For instance, they can create a new account for the gift card they received, redeem the $100 gift card on it, then sell the password for the account on the black market for $80.
Alternatively, they can buy a hot-selling item for $100 from the store they got the voucher for. They can then sell this item cheaper: it's bound to catch the attention of shoppers looking for a good deal.
How to Spot a Gift Card Scam
Gift cards make it really easy for a scammer to harvest people's funds. However, it's a huge red flag too.
The truth is, no company or person will ask for payment for something in gift cards. The IRS is not interested in $100 gift card vouchers for Amazon, and neither is Microsoft. If these or any other companies demand financial payment, it will be through a money transfer and not a gift card.
As such, if a stranger claims to be from a specific organization and asks for payment in gift cards, do not pay them.
The reason they're asking for a gift card is that they're scamming you, and they don't want to leave a paper trail. There are no situations where you can pay a fine, fee, or any business transaction through gift cards.
Sometimes, a scammer may even impersonate a friend or family member to trick you into sending over a gift card.
If you get a call supposedly from a desperate-sounding relative who needs a gift card to solve a specific problem, hang up immediately and contact the person yourself to see if it's really them. A scammer will try their best to stop you from hanging up, so don't listen to them.
Similarly, there are cases where a scammer will give you a large sum of money, then ask you to pay some back in gift cards.
Unfortunately, that "large sum of money" was paid with an invalid check or a stolen credit card, so the funds vanish after a period of time... right after you used them to send a gift card to your "benefactor." This is common in sugar daddy scams.
The Gift That Keeps on Taking
Gift card scams are popular among cybercriminals, because they're easy to buy, easy to send over, and hard to trace. However, there's one crucial flaw with the scam: if you see someone ask for payment in gift cards, run away immediately!
Fortunately, there are legal and accepted ways to sell on gift cards you no longer want. For instance, there are entire websites out there that let people sell on their gift cards.
Image Credit: smile23/Shutterstock.com.