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In Gift Cards 101: How to Start Selling Gift Cards, we covered the top 8 gift card program benefits. in a nutshell, gift cards help you increase sales. New customers, loyal customers—almost everyone loves giving and receiving gift cards. And fraudsters? They love gift cards, too, and are always looking for new ways to commit gift card fraud.

As a business owner, you need to know the types of gift card scams that are out there, and what you can do about gift card fraud prevention. Let’s start by looking at fraud that targets your customers—we’ll look at gift card fraud that targets your company below, in Businesses Beware: Gift Card Scams Happen to You, Too.

Consumer Concerns:

The Ever-Evolving Gift Card Hoax

When you manage your own gift card program, fraud must always be top of mind. Why? Because gift card scams abound, and your customers could become victims. Here’s how the FTC describes consumer gift card scams:

“If someone calls you and demands that you pay them with gift cards [emphasis ours], you can bet that a scammer is behind that call. Once they have the gift card number and the PIN, they have your money. Scammers may tell you many stories to get you to pay them with gift cards, but this is what usually happens:

“The caller says it’s urgent. The scammer says you have to pay right away or something terrible will happen. But you don’t, and it won’t. …
“The caller usually tells you which gift card to buy. They might say to put money on an eBay, Google Play, Target, or iTunes gift card. They might send you to a specific store — often Walmart, Target, CVS, or Walgreens. Sometimes they say to buy cards at several stores, so cashiers won’t get suspicious. And, the caller might stay on the phone with you while you go to the store and load money onto the card. These are all signs of a scam.”


Published: March 17

Florida Keys deputies warn of multiple scams involving gift cards
MONROE COUNTY, Fla. – The Monroe County Sheriff’s Office is warning residents about multiple internet, computer, and gift card-related scams this week.

In each case, the victim is notified by someone falsely claiming to be from Microsoft, Facebook, or an internet provider stating the victim’s computer, internet access, or bank account was compromised in some way. … The scammer states they can rectify the issue after receiving payment in the form of gift cards.

… The criminals sometimes use real law enforcement phone numbers and often will use real local law enforcement officers’ names during some scams. Some residents have previously reported getting calls from someone posing as Sheriff Rick Ramsay.

Top 8 scammers’ tricks and techniques

Persuasive and adamant, scammers will pretend to be somebody they’re not, such as:

  1. The IRS or the Social Security Administration
  2. Tech support, such as Apple or Microsoft
  3. A charming love interest on a dating site
  4. A distant family member in trouble
  5. A company awarding you an unexpected prize
  6. Your power company or other utility
  7. Local law enforcement
  8. A friend-of-a-friend who needs a check “cashed” for gift cards

Businesses Beware:

Gift Card Scams Happen to You, Too

You might be surprised to hear that your business could also be a victim of gift card fraud. These stories rarely hit the news, but they certainly happen.


Published: September 2 by Brian Krebs

Here’s the story of a cybercrime group that compromises up to 100,000 email inboxes per day, and apparently does little else with this access except siphon gift card and customer loyalty program data that can be resold online.
… [This crime gang merely uses custom, automated scripts that periodically log in and search each inbox for digital items of value that can easily be resold.

And they seem particularly focused on stealing gift card data.

“Sometimes they’ll log in as much as two to three times a week for months at a time,” [a trusted source in the security industry] said. “These guys are looking for low-hanging fruit — basically cash in your inbox. Whether it’s related to hotel or airline rewards or just Amazon gift cards, after they successfully log in to the account their scripts start pilfering inboxes looking for things that could be of value.”

While this gift card scam seems to target consumers, the ultimate victims are the companies that issued the gift cards; they’ll have to replace the funds to keep their customers happy. And will the scammers get caught? Unlikely.

Here are some other common forms of gift card fraud that affect businesses.


“Here, take my credit card. It’s not mine.”

Ecommerce opens up a world of prospective customers, but it also makes it easier for bad actors to commit gift card fraud. In this case, a stolen business credit card is used to purchase bulk gift cards, and the perp is gone with the wind.

“My ‘company’ is new. I created it to scam you.”

Empty shell companies are surprisingly common—and created for the sole purpose of committing fraud. These companies exist to let scammers hide their identities and obscure the origin, flow, and destination of funds.

“It’s your boss’ boss. Order a bunch of gift cards asap.”

In this case, the actual executive never sent this request. Fraudsters did, but the unwitting employee follows orders, eventually sending the gift card information, including card numbers and PINs, back to the fake ‘executive.’

“I work for this company. Trust me.”

Sometimes an actual employee is a bad actor. In this case, gift card purchases are made through legitimate corporate channels, but the employee pockets the gift cards. This gift card scam can take months to work through a company’s system before the unauthorized purchase is flagged, long after the gift cards are used.

“You don’t even know I’m here.”

Another type of gift card fraud involves criminals directly targeting your gift card program as a whole. Through sophisticated tactics, they gain intelligence about how cards are activated and balances are checked. They also can manipulate that system, often from inside your organization.

Trust TOTUS with Your Gift Card Fraud Prevention

With global gift card sales expected to reach $2 trillion by 2030,1 businesses must be proactive about fraud prevention. If you don’t have an in-house fraud expert, you should consider outsourcing your end-to-end gift card program management.

TOTUS offers sophisticated gift card fraud detection and prevention. We’ll take the stress off of you by leveraging our expertise to identify and minimize gift card scams. And along with fraud mitigation, we’ll handle everything to optimize your gift card program, from issuance to delivery and more.

Let’s talk about your gift card fraud concerns, and how TOTUS can help.