Decoding the Psychology: Why Do Scammers Insist on Gift Card Payments?

In a world where scams are becoming increasingly sophisticated, it's worth examining why scammers insist on gift card payments. What is it about these seemingly innocuous plastic cards that makes them so appealing to fraudsters? The psychology behind this tactic is fascinating, and in this article, we will decode it. Gift cards offer scammers several advantages: they are easily transferable, untraceable, and can be used as currency in online marketplaces. By demanding payment in gift cards, scammers ensure that their activities remain hidden from law enforcement and financial institutions. Moreover, gift card transactions are often irreversible, leaving victims with little recourse once they realise they have been defrauded. Understanding the motives and methods of scammers can help protect individuals and businesses from falling prey to their schemes. By staying informed, we can equip ourselves with the knowledge to identify and avoid scams involving gift card payments.

Source image: https://www.123rf.com/profile_rawpixel

What is a gift card and how can you use it as a payment option?

A gift card is a form of payment that can be used at a variety of retail stores, petrol stations, restaurants, and other establishments. In many instances, gift cards can be used to pay for online purchases. Each gift card has a unique number, which is used to identify and monitor the card's value. This enables you to apply the gift card's value to your online purchase. It is crucial to note that not all gift cards can be used for online purchases, as this depends on the issuer's specific terms and conditions. The purchase amount will be deducted from the card's available balance, which can then be applied to future expenditures. Some gift cards can be used to make online purchases by inputting the card number and PIN during checkout.

For more information about how a gift card works, you can read the article on Cardsource-How do gift cards work. And the article in investopedia-Pros and cons of gift cards.

Commons tactics used by scammers.

Scammers' sole objective is to defraud you, either because they want to steal your money or because they need your personal information for their unethical and unlawful activities. They use various methods to deceive and defraud unsuspecting victims. Common strategies include:

Phishing:The most well-known method that scammers use to obtain bank account numbers or personal information is phishing. In order to deceive unsuspecting individuals, they construct fake websites on which they pose as legitimately as possible. For more information about phishing, check out the YouTube video, The 5 Types of phishing scams to avoid, of the channel VPNpro.

Charity:Here, individuals are solicited to donate money to a purportedly noble and worthwhile cause. Obviously, the money ultimately winds up in their pockets.

Investing scam:Scammers who perpetrate investment scams typically advertise their lavish lifestyles on social media platforms like Instagram while simultaneously soliciting others to entrust them with their money and invest it on their behalf. Pyramid schemes are one such example.

Romance scam:Lastly, there are the romance scammers, who attempt to form an emotional connection with their victims primarily through dating apps such as Facebook Dating, Tinder, etc. It may take days to weeks before they make their first move, and they may use video communications to increase the victim's trust. This type of deception concludes with the scammer requesting money from the victim, claiming an urgent need, an inability to access the bank account, and the need to purchase plane tickets. Typically, they request it in the form of a gift card.

The appeal of gift cards for scammers.

There are a variety of reasons why scammers prefer this method of payment.

Gift cards enable fraudsters to receive payments without disclosing their identities. This makes it more difficult for law enforcement agencies to locate them. Unlike other payment methods, such as bank transfers and PayPal, they are not required to provide authorities with clear, readily identifiable information.

Once fraudsters obtain gift card credentials, they are able to redeem them or sell them on the black market immediately. This gives them immediate access to the funds.

In contrast to conventional payment methods such as credit cards and bank transfers, gift card transactions are typically irreversible. This implies that it is virtually impossible to recover the funds once the gift card has been redeemed.

Lack of security measures: Since gift cards are typically not associated with personal information, they are an easy target for fraudsters. They can simply take advantage of this lack of security measures.

You can also check out this short video, Why do scammers want gift cards, on the Youtube channel Scam Takedown Task Force.

How the scammers manipulate victims into using gift cards?

In addition to the romance scam, where they use emergency situations to extract a gift card from their victims, there are other cases, such as creating fear and extorting something that you must pay for quickly, or they will call the police. Although the excuses are endless, the basic method is to challenge the victim to act quickly, not to think clearly, and to emphasise the negative consequences if the victim does not comply.

Fear plays a crucial role in creating a sense of urgency and in the scammer's attempt to prevent the victim from thinking rationally.

Real life examples of gift card payment scams.

There are many real-life examples of gift card payment scams. Here are a few:

The IRS Scam: Scammers call people and pretend to be from the IRS, claiming that the victim owes taxes and will face legal action if they don't pay immediately. They ask for payment in the form of gift cards.

• Tech Support Scam: Scammers pose as tech support agents and convince people to give them remote access to their computers. They then claim to find problems and ask for payment in the form of gift cards to fix them.
• Romance Scam: Scammers create fake online profiles and develop relationships with people, often over a long period of time. They then ask for gift card payments for various reasons, such as to buy a plane ticket to visit the victim.
• Utility Scam: Scammers call people and claim to be from a utility company, threatening to shut off their service if they don't pay immediately. They ask for payment in the form of gift cards.

It's important to be aware of these scams and not share gift card codes with unknown individuals or entities.

As I mentioned in previous articles, for UK citizens, Action Fraud is the national reporting centre for fraud and cybercrime.

Conclusion

Gift cards are especially susceptible to fraud. The unfortunate truth is that scammers know how much fraudsters love these types of payments because there are a significant number of mining sectors involved in the process of redeeming gift cards and selling them on the black market. Although gift card fraud is not a new phenomenon, the use of this payment method is on the rise. Scammers are constantly coming up with new ways to defraud the public, which makes this type of fraud particularly difficult to prevent. When someone is scammed out of money, it's important to take a step back and take stock of the situation. The most important thing to remember is that it is never too late to protect yourself against fraud. It is never too late to learn about the latest scams and schemes taking place so that you can avoid falling victim, especially when it comes to gift card payments.

Relevant articles.

The pyramid scheme.

Common  tactics scammers use to target you on Instagram.

Take action: Keep yourself informed with the most recent articles and updates, and follow the blog’s Facebook page in the side bar or by filling out our contact form, conveniently located at the bottom of the page, for more valuable content. Help us expand the blog’s reach by sharing the articles on social media. Spread knowledge and inspiration! Get the word out about our amazing blog by utilising the social media icons provided below. Whether it's Twitter, email, Facebook, Blogger, or Pinterest, every share helps us connect with more readers and has a greater impact on the blogging community. Let's join forces and create a ripple effect of valuable content. Your support means everything to us!