Don't Be Fooled by Gift Card Scams

The phone rings and the caller claims that your utilities will be shut off if you don’t immediately pay up—using a gift card. Or he says you’ve won a prize, but to claim it, you must first use a gift card to pay an upfront fee.

Such tactics are used by criminals perpetrating gift card scams, and AARP Iowa is helping to educate consumers about such fraud.

“It’s a really big red flag if someone asks you to pay for something with a gift card,” says Neil Shultz, a retired division chief with the Polk County Sheriff’s Office from Des Moines who now serves as an AARP fraud educator.

Another popular ploy: a caller says that a person’s grandchild is in trouble and needs money quickly in the form of gift cards. Thieves like gift cards because they’re virtually untraceable and easily turned into cash, Shultz says.

AARP Iowa will urge state lawmakers during the 2024 legislative session to pass a law requiring retailers to post information on how gift card scams work and how to avoid them.

“We can’t protect people from things they’re not aware of,” says Paige Yontz, AARP Iowa’s advocacy manager.

Some retailers already train employees to spot scams in action. They try to get the potential victim to slow down and think about it, Shultz says.

Sometimes scammers will keep talking to a potential target on the phone even as the person enters the store. Seeing a sign, or hearing a gentle question from an employee, could prevent a fraud from happening, he says.

“They don’t just prey on people who are gullible and naive,” Shultz says. “These are well-intentioned, educated people, but scammers deliver a message that’s so compelling that people who wouldn’t believe it are pulled in.”

—David Lewellen