NJ Issues Consumer Alert: Beware of Gift Card Fraud

As New Jersey steps up efforts to avoid gift card scams on the retail level, officials have issued a consumer alert so residents aren't next up in a long line of victims.

Gift card fraud may have cost consumers as much as $148 million in just the first nine months of 2021, according to the Federal Trade Commission. During that time, the FTC received over 39,000 reports of gift card fraud.

The scheme has become increasingly common in recent years, according to the alert from the New Jersey Division of Consumer Affairs. Typically, a scam involves impersonators contacting consumers and urgently demanding payment in the form of gift cards. These demands can come over the phone, text message, or email, sometimes appearing to originate from legitimate phone numbers.

According to officials, some scammers may ask for physical gift cards to be sent, while others may only ask for a card's pertinent information, so they can spend the funds without physically processing the card.

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"Be wary of any requests for payment via gift cards – no legitimate business or government agency will ever ask for payment exclusively in the form of gift cards," the alert reads.

Scammers have also been known to impersonate employers or family members, according to the alert.

Along with the alert for consumers is a set of guidelines for retailers to train their employees on how to spot consumers who may be falling victim to gift card fraud. For example, cashiers may be right to be suspicious of someone who's buying multiple gift cards with high dollar values, or immediately taking pictures of the gift cards' serial numbers.

"The best tool we have to fight gift card scammers is widespread awareness of how they operate and how to stop them in their tracks," said Acting Attorney General Matthew Platkin.

The guidelines implement New Jersey's Stop the Fraud law, which was signed by Gov. Phil Murphy in January. The law requires retailers that sell gift cards to train employees on how to identify and respond to fraud.