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What is a Gift Card Scam?

By Sherry Holetzky
Updated: May 16, 2024

Unfortunately, some people use their creativity to find ways to steal from others instead of coming up with reputable ways to make a profit. Examples of this phenomenon include gift card scams. When you purchase shopping cards to give as gifts, there are some things to keep in mind to avoid becoming the victim of such scams.

First, it is better to purchase cards directly from a store than from a website, especially if your computer is not highly secure. The numbers on the card can be intercepted. Even if this doesn’t take place, a mailed card can be stolen. Thieves often watch mail for valuable items, especially around the holidays, which may provide an opportunity to perpetrate gift card scams.

When purchasing shopping cards in a store, remember that those within reach of customers are usually the most vulnerable to gift card scams. A deceptive individual may simply write down the numbers on new cards and then continue calling the help center to see when one has been activated. He or she may then use that number to make purchases online. When you or someone you have given a gift card to attempts to use it, the balance may be well below the expected amount, if not maxed out completely.

Other methods of gift card scams include switching cards that come in decorative holders or envelopes. This type often has the barcode on the back of the envelope. A scam artist can simply remove the new card and place an old one inside. When the cashier rings it up, the new card is activated with the amount you asked to have loaded onto the card. The scam artist has access to that money and the card you have is worthless.

If you purchase a gift card from a rack, ask the cashier to check the number on the card against the barcode. You can also ask the cashier to immediately check the balance and make sure the correct amount is on the card you purchased. Make sure personal identification numbers are not exposed, as this could be a sign of gift card scams.

Many cards include a toll free number on the back and others provide a website where you can register your card. You can call or login to check the balance, or to report lost or stolen cards as well as gift card scams. Be sure to keep your receipt, and if you believe you or someone you know has been taken by scams, please report the loss as soon as possible by calling or visiting the store’s website.

Theft and fraud are not the only gift card scams out there. Some stores also place an expiration date on cards that you may not notice. If the recipient doesn’t use the card in the allotted time, he or she will lose the entire amount, even though his or her intended purchases were prepaid. Some states have passed laws disallowing expiration dates on prepaid cards and gift certificates. Some allow it only after five or more years, and many ensure that retailers provide full disclosure of expiration policies. Still, it makes sense to check it out and to follow these other tips so people cannot take advantage of you if you purchase gift cards.

HomeQuestionsAnswered is dedicated to providing accurate and trustworthy information. We carefully select reputable sources and employ a rigorous fact-checking process to maintain the highest standards. To learn more about our commitment to accuracy, read our editorial process.
Discussion Comments
By anon949265 — On May 04, 2014

I have used Vanilla Visa cards without a problem for a year or so, but in the last month, my purchases using Vanilla Visa are being declined, especially on Amazon. I've lost almost $100 this way.

If you want to buy from Amazon, just get an Amazon Gift Card! But whatever you do, be wary of Vanilla Visa Gift Cards.

By anon929041 — On Jan 30, 2014

My wife received a $100 Vanilla gift card from the in laws bought at Walmart in Pear City Hawaii. We went to Target in Hilo to buy a $34 toy for my son and the card was declined. We called Vanilla's customer service and they took down all of our information and said someone should call in three days.

On the fifth day after no follow up, we called again and they said that there is no activity on our complaint. We are now feeling that this is not right. The gift card came with a receipt so we took the card to the nearest Walmart to get it returned. After standing in line we finally talk to the customer service representative. She called the Vanilla card phone number and they said that card is not activated. She said we cannot return the card because the card paid for and the card we have is different. We asked how can that be? She said maybe the cashier gave my in laws an inactivated card on accident.

I called my in-laws and they said they pulled it off the shelf and paid for it. The Walmart customer service representative said she would call Walmart in Pearl City to check the cameras to see if the cashier switched cards by accident or on purpose.

Another investigation is open and no one has called back. All this lost time and energy over a $100 gift card. Who knows how many times this has happened? Scary to think that these big companies can get away with this without any consequences. Bottom line; my in-laws lost $100 purchasing a Vanilla Gift card at Walmart in Pearl City, Hawaii.

By anon337342 — On Jun 04, 2013

Is Vanilla Visa a legit company? As a merchant I've dealt with a couple incidents where the buyers used Vanilla Visa gift cards that turned out to be reported as a fraudulent transactions. So I was wondering if say the user of the Vanilla Visa gift card had purchased the Vanilla gift card using a different credit card that was stolen/counterfeit, or if the Vanilla Visa card was encoded with legitimate account data that was skimmed/stolen; OR if the Vanilla Visa card itself was a fake/counterfeit card loaded with stolen account holder info. It's getting difficult to discern nowadays what's fake and what's not.

By anon293582 — On Sep 26, 2012

That is normal business practice. Some people just don't know how merchant processing works.

By anon148211 — On Jan 31, 2011

Same thing happened to me, what a freaking scam to shave some interest.

By anon129988 — On Nov 26, 2010

Thanks for the advice. will not use a vanilla visa gift card.

By anon74226 — On Mar 31, 2010

Beware of Vanilla Visa Gift Cards. I recently purchased one for $200.

My first transaction was an online purchase from a very reputable company for $77. Vanilla Visa, however, deducted twice that amount from my balance on this transaction, claiming it was the merchant who authorized the hold on the doubled amount.

The merchant however supplied me with the transaction record, and did not charge me more then the purchase price.

When I presented that info to Vanilla Visa, they then claimed that they were required by Visa to hold the extra amount for seven days in case the merchant needed access to the funds. Psycho babble.

Who do you report this to? Would it even do any good? Floating my $77 for seven days, along with who knows how many other of their customers money, collectively could earn a tidy sum in interest over the course of a year.

Anyway, stay away from Vanilla Visa.

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