Gift card fraud affects people of all ages, causing the average victim to lose $1,000. Younger victims are twice as likely as older adults to lose money, but adults ages 70 and up generally lose larger amounts. Although losses may be lower on gift card fraud than other payment mechanisms, the loss of $1,000 would be potentially debilitating for the roughly one in three U.S. households who report they would have difficulty covering even a $400 emergency expense. Since the start of the pandemic, gift card fraud has rapidly increased, with reported cases more than doubling in frequency.
This report offers a look at gift card fraud from various angles before providing an assessment of industry’s role in intervention, both currently and in terms of future opportunities. This assessment is informed by a series of 1:1 interviews and surveys with more than 30 industry representatives as well as a comprehensive review of research and data from the Federal Trade Commission, non-profits, AARP and industry associations.
Gift Card Fraud and Its Victims
This type of scam can take many forms. Most commonly, a scammer contacts a person with a phone call, email, text or social media message pretending to represent a company that the person may do business with, such as a bank or local power utility, or claims to be an IRS investigator. They use an…
