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Posted on: November 17, 2022

Beware of Gift Card Scams

Image of Santa hat, computer and hands typing in number from a gift card

The holiday season is just around the corner, and unfortunately so are holiday scammers. The Lakeway Police Department wants all residents to be aware of potential scams that could creep up during this time of year. Besides avoiding phone calls where potential scammers try to get your personal information, or being careful not to click on any links online that look suspicious, this time of year you ALSO need to watch out more for gift card scams, especially those targeting older individuals. 

According to AARP (the advocacy group for older Americans), gift card fraud against the elderly has increased 74% in recent months. In fact, the Colleyville, Texas police department recently broke up a laundering ring that scammed more than $3 Million out of victims across the U.S. That police department ended up confiscating more than $681,000 worth of gift cards in relation to that operation. 

Remember that gift cards are for gifts, not for payments. As soon as someone tells you to pay with a gift card, that is more than likely a scam. Gift cards are popular with scammers because they're easy for people to find and buy. They also have fewer protections for buyers compared to other payment options. They're more like cash in the sense that once you use the gift card, the money on it is gone and difficult to track. Once a scammer has a gift card number and PIN, they can use the card as their own and any funds that are on it. 

Here are some tips from the Federal Trade Commission (FTC) on avoiding a gift card scam through some of these common schemes:

  • Beware of callers saying they're from the government, maybe the IRS or the Social Security Administration. They may say you have to pay taxes or a fine, and ask for a gift card number and PIN for payment. It's a scam. 
  • Beware if someone calls from tech support from a popular tech company. They may say there's something wrong with your computer and you have to pay them to get it fixed, again, possibly using gift cards. This is a lie. 
  • Beware on dating websites if someone asks for money to help with an issue. This is a romance scammer that can make up a story to trick you into sending them gift cards. Never send money to anyone you haven't met in person - even if they send you money first.
  • A scammer pretends to be a friend or family member in an emergency situation and asks you to send money or gift cards right away, but not tell anyone. This is traditionally called a "Grandparent Scam." If you're worried in this situation, hang up and call the friend or relative directly to check that everything is all right. 
  • Someone says you've won a prize, but first you have to pay fees with a gift card. No honest business or agency will every make you pay with a gift card. 
  • A caller says they're from the power company and threatens to cut off your service if you don't pay immediately through a form of payment, including gift cards. Utility companies don't work this way. Reach out to the number on your statement if you're worried about your power service. 
  • Watch out if you get a check from someone for way more than you expected. They may tell you to deposit the check, then give them the difference on a gift card. Don't do it! The check may be accepted at your bank, but could take days to clear and if you draw money out of your account early, when the check doesn't clear, you could be liable for the amount you took out to pay for the gift cards. 

You can report a scam to the Lakeway Police Department by calling (512) 261-2800 or reporting it through an online form by CLICKING HERE.  

And click the link below for more details from the FTC on how to spot a gift card scam, and what to do if you think you are a victim:

Additional Info...
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