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Gift Card Scam


The use of gift cards to steal money from consumers has become prevalent nowadays. Be mindful that this scam takes many forms, but for now, our focus is on the Pay the IRS with Gift Cards Scam.


How it Works

  • A caller pretends to be from the Internal Revenue Service (IRS).
  • With an intimidating approach, the scammer accuses the victim of tax evasion.
  • The fraudster informs the victim to pay with gift cards to avoid imprisonment.
  • These scammers know that once you buy gift cards with your debit or credit card, Visa can no longer take action or block the transaction when you file a fraud case with your financial institution.


The Red Flags

Know the telltale signs of these scammers.

  • The IRS will never call you.
  • The IRS will never ask for gift cards as a mode of payment.
  • An intimidating voice is used by scammers to put you in a state of panic.


How to Outsmart Them

  • Be cautious when dealing with a phone caller, asking you to pay with gift cards.
  • Hang up the phone immediately.
  • Never open any suspicious-looking emails pretending to be from the IRS.


If You Become a Victim

If this happens to you, immediately reach out to the gift card provider and inform them of the situation.

Never Use Gift Cards to Pay for a Service

More broadly than the IRS Payment scam, be wary of any request to buy gift cards and provide activation numbers or photos. Gift cards are just that – a gift. Anyone who asks for a gift card as a means of payment is likely a scammer.

Once a scammer gets the gift card information, they can access the funds in several ways, including:

  • Direct purchase of goods or services
  • Selling the card’s value on the dark web

And since a gift card is like cash, it’s hard to dispute such a purchase, as most merchants won’t consider the purchase of the gift card itself to be fraudulent.

What Can You Do?

If you realize that you’ve been scammed after giving the caller your gift card information, notify the company that issued the card right away (Apple, Amazon, Google, etc.). If you call them in time, they might be able to freeze the gift card, and you may be able to get a refund – but this is not a guarantee. Be sure to retain the physical card and any receipts. The FTC’s article on this scam includes a list of some of the most common companies involved with advice and contact information.

Additional steps include:


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