Scammers are turning to gift cards to try and trick consumers into giving away their hard-earned money. In 2018, consumers lost more than $50 million in gift card scams alone -- that's a 150 percent increase from 2015.
After an extensive online hunt, Carmen Strange finally found the missing piece to her discontinued bedroom set. "I was shopping for some drapes to go with this comforter that I'd bought," explains Strange.
However, a few days after making her purchase securely through PayPal -- the transaction was canceled. The online store she used reached out asking for a different form of payment. "They sent me another email asking for gift cards -- either Walmart or Amazon," Strange says.
In bold letters, she was encouraged to "make a payment today to avoid termination" of her order. "It was kind of iffy or kind of odd I thought, but I really wanted those curtains!" Strange recalls.
She purchased, then sent the seller a card number and pin for a $100 Walmart gift card. The curtains only cost $83, but soon the entire gift card was drained. When the seller claimed the package was delivered but Strange never got it-- her suspicions were confirmed that she'd been scammed.
"It's disappointing and aggravating. I sent a lot of emails afterwards just expressing my disgust and that they were thieves but they never responded after that," Strange says.
The Better Business Bureau in Central Texas says anytime a seller asks for you to pay in gift cards you should consider it a red flag. "Once you do pay, it's pretty much gone and out of that account," says Jarrod Wise, vice president of communications for the Better Business Bureau of Central Texas.
According to the Federal Trade Commission, consumers lost $20 million in gift card payment scams in 2015. In 2018, that number surged above $53 million.
Crooks use brands you know combined with high-pressure tactics to make skeptical buyers fall for their tricks. "Scammers are going to try to use any kind of method they can to try to win your trust and to try to get you to pay certain ways," says Wise.
However, it doesn't stop with gift cards. Hundreds of PayPal look-alike emails have been reported to the BBB.
A Louisiana woman lost $3,000 in designer sneakers when the thieves sent her payment that looked like the real deal. The payment email contained the PayPal logo, didn't have any spelling mistakes and even included a live link to PayPal's website. The only clue that it was fake was in the email address which didn't contain the word "PayPal" at all. The seller had no recourse because PayPal wasn't really involved.
"They told us there's nothing they could do to help us because it didn't come from PayPal," says Indica Mosley who sold the sneakers but never received payment.
To avoid becoming a victim, the BBB says you should: