Gift cards make easy money for scammers

Dec. 27, 2019

This paid piece is sponsored by the South Dakota Retailers Association.

This year, as you plan your end-of-year giving, protect yourself against illegitimate requests. South Dakota is seeing a spike in gift card scams, following national trends.

According to the Federal Trade Commission, con artists favor gift cards because they can get quick cash, the transaction is largely irreversible, and they can remain anonymous.

“We want to make sure our members and all South Dakota businesses are looking out for threats to their bottom lines,” said South Dakota Retailers Association executive director Nathan Sanderson. “So much communication happens over emails and text messages that it is becoming easier for these unlawful acts to take place.”

Jody Gillaspie, director of South Dakota’s Consumer Protection Division, highlights three recent gift card scams her office has dealt with.

Gifts for the staff

In this scenario, a company’s bookkeeper receives an email that appears to come from the boss with instructions to purchase 20 gift cards that the boss plans to give to a group of outstanding employees. After buying them, the financial person is told, “Please code this to Administration, and email me the gift card numbers for tracking purposes.” It sounds legitimate, but in reality, the email comes from a scammer. More than one South Dakota company has been the victim of this scam.

Gillaspie offers some simple advice. “If you’re getting an email from the administration asking you to purchase gift cards for employees or for a worthy cause, simply stepping out of the office and talking with that individual to make sure it’s on the up and up will save your company and yourself a lot of agonies.”

Government payment

Businesses and individuals are receiving calls that are purportedly from the IRS or another government agency, demanding immediate payment with a gift card. The caller pressures the person to buy a gift card and confirm it by reading the numbers on the back of the card.

“The rule of thumb,” Gillaspie said, “is no reputable company nor the IRS or any government agency is ever going to demand gift cards for payment.”

Church donations

Church members receive an appeal via email or text asking them to purchase gift cards for a worthy cause. The parishioners are asked to buy cards and email or text the gift card numbers so the church has confirmation. A good number of South Dakotans who received this message did as asked only to find out their church’s system had been hacked and the messages actually had come from scammers who ended up with the money from the gift cards.

“Picking up the phone and just making a simple phone call to double-check can save you a lot of time and loss,” Gillaspie said.

She noted that in some cases hackers have gained access to business email systems, which in turn gives them access to online calendars for that company. They know when certain key people will be out of the office and target the company with scam emails during those periods.

“The first step to protecting your business is educating yourself; the next step is educating your employees,” Sanderson said. “SDRA works hard to provide informational materials to businesses so they know the dangers and how to prevent scams in their stores.”

Businesses are encouraged to alert their employees to the potential for fraudulent emails and calls, and to always make sure you know with whom you’re dealing.

Do you think you may have been the victim of a scam? Contact the South Dakota Consumer Protection Division at 800-300-1986.

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Gift cards make easy money for scammers

South Dakota is seeing a spike in gift card scams, following national trends. Take a look at how some have been victimized, so it doesn’t happen to you or your business.

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