As the holidays arrive in all their mad frenzy, one thing will be very different this year: gift card giving will be up 27% as supply chain issues impact shoppers’ ability to get the actual presents they want. And with that comes a darker side to gift cards that most Americans aren’t aware of: scammers working overtime.
Gift cards are now used in 25% of all scams, to the tune of nearly $500 million worth of fraud since 2018. The reason this issue has become so widespread is because gift cards are totally untraceable; the moment the number and pin code on them has been revealed to a wily scammer, all your hard-earned cash is gone forever.
Don’t think you would fall for a scam? Are you too ashamed to admit that you have? In fact, according to recent survey by Scam Spotter, Americans are the targets of nearly 30 scams per person every month, and the average person has fallen victim to five scams and lost over $500. And, yes, most people are embarrassed about it. However, talking about it is the cure.
As a psychiatrist and cybersecurity expert, each with decades of experience, respectively, we’re here to let you know that the days of the blatant Nigerian prince scams are long gone.
Scammers are clever, highly knowledgeable about you, and prey on people’s fears.
Common scenarios include calling grandparents and telling them their beloved grandchild is jailed overseas and needs bail money ASAP.
They email entry-level employees, pretending to be their boss, asking them to purchase gift cards as a bonus for their co-workers.
They pretend to be tech support fooling tech-savvy millennials. And, they target people of all ages telling them they have won a sweepstake or reward.
These fraudsters conduct research on their intended victims, making these scams seem even more believable, and use intimate points of contact, such as text messages, phone calls, or direct messages on social media.
Scammers prey on their victim’s sense of hope, loneliness, and most effectively, their fear of loss.
In psychology, this is called "loss aversion bias," which is the idea that loss is two times more powerful than that of gain in creating action/behavior.
In most instances, once the scammer gets the victim to a heightened emotional state, the victim doesn’t take the time to stop and think clearly. The scammer is able to create a believable scenario to the point where the person feels they need to act immediately by getting the gift cards to remedy the situation.
Once the "threat" is over -- and the victim had time to think -- they realize they were conned, and the embarrassment and shame kick in, which can lead them to not share their experience with others.
But, there are some easy solutions for people to protect themselves and their loved ones.
We at the Cybercrime Support Network created a platform called Scam Spotter to teach people how to spot a scam to protect themselves and their loved ones.
The number one rule of thumb is that if any company or organization asks for payment via gift cards -- it’s a scam. However, if you’re still uncertain, slow down and ask questions, confirm all of the information given, and stop before sharing any information.
Everyone should take the time to learn the signs of gift card scams to ensure their family and friends avoid losing money to a gift card scam. The elderly are particularly at risk, but so are millennials moving quickly on their phones as they reply to a seemingly urgent text.
These holidays please do unto others and help protect your loved ones from gift card scams.
Stacey Wright, CISSP, is the Vice President of Cyber Resiliency Services at the non-profit Cybercrime Support Network (CSN) where she supports CSN’s mission to assist individuals and small businesses before, during, and after a cybercrime incident.
Dr. Gail Saltz is a Clinical Associate Professor of Psychiatry at the New York-Presbyterian Hospital, Weill-Cornell Medical College, and a psychoanalyst with the New York Psychoanalytic Institute.
For more information visit ScamSpotter.org.