By just about every measure available, the money lost to gift card fraud has never been higher, according to the Better Business Bureau (BBB). The famously consumer-centric organization has released a new study describing many popular gift card scams, why they work and how consumers can avoid them. The rule of thumb people should always fall back on is advice the BBB borrows from the Federal Trade Commission: “Anyone that demands payment by gift card is always a scammer.”
While the report principally hopes to educate how consumers can educate themselves on gift card fraud, it does contain some interesting information that could be valuable for businesses as well. Gift cards have been the most popular fraud payment method every year since 2018 and the median loss associated with a single gift card scam is $840. And, eBay, Google Play, Target, iTunes and Amazon gift cards are the brands most reported to be involved in fraud attacks.
Another section of the report that might interest businesses is the one on how fraudsters cash out. Some ways are familiar to fraud professionals (e.g., buying physical products in stores they can easily sell for cash, reselling the cards on third-party online marketplaces). Others are newer, like exchanging cards for digital currency like Bitcoin and converting that into fiat currency.
According to the report, the FTC recommends the payment and retail industries continue to educate the public about how gift cards can be used against them and provide more training for tellers and cashiers in face-to-face situations.