The Federal Trade Commission is starting a new program to try to keep consumers safe from scammers. Gift cards are the favorite method of scammers who convince consumers that they are in trouble with the Internal Revenue Service, a law enforcement agency or someone else and need to pay immediately by going to a store that they specify and buy a gift card. Then, they ask the caller to give them the PIN off the back of the car. The program allows merchants to display signs at their cash registers and on the racks where they sell gift cards.

How Many Scams Happen Annually?

While these scams have been around for many years, the FTC continues to say that they have been the most popular scam technique since 2018. Each consumer who falls for the scam loses an average of $640, with Americans losing about $245 million annually.

The number one group reported to the FTC by consumers is business imposters. They account for over 20,000 reported scams annually, and of those, over 35% demand to be paid with gift cards.

The second-largest group of scammers are those who pretend to be government imposters. Report about 10,000 of these cases annually to the FTC. Approximately 40% of them want you to pay them with a gift card.

The third-largest group of scammers are those who pretend to be IT specialists. About 5,000 reports are filed annually, with 33% wanting to be paid by a gift card.

The FTC receives other scamming reports throughout the year, including romance, fake check, lotteries and sweepstakes.

What Does a Common Scam Look Like?

Usually, scammers tell the person to go to a specific store. The chosen store varies widely, but Walmart, eBay, Walgreens and CVS are typical. Once at the store, the scammer tells the individual to buy a specific gift card. Again, the card chosen can vary widely, but it often includes iTunes, Google Play or Target. Sometimes, the scammer will instruct you to buy several gift cards at different locations, depending on much money they are trying to scam you out of currently. Often, the scammer will have the individual call them while they are at the store and even tell them what to say to the cashier if the employee suspects that the person may be being scammed.

What Should You Do If You Have Been Scammed?

If you believe that someone has scammed you, then you should call the company that issued the gift card right away. If you act fast enough, the company may be able to refund your money or the remaining balance on the card. You should keep the card and your purchase receipt. You should also notify the store where you make the purchase.

Your next step should be to report it to the FTC. You can contact them at 1-877-FTC-HELP or by going to their website.

Finally, you should report the scam to your state attorney general's office.

What are Some Common Scams?

According to Amazon, some types of scams are prevalent, including:

• COVID-19 Scams: An individual you know from work or a social organization contacts you to purchase gift cards to help with the fight against the pandemic. In this case, the person's account has been hacked. Your first step should be to contact that individual so that you can alert them to the scam.


• Identity Scams: Someone contacts you pretending to be the Social Security Administration or another government agency and asks that you purchase gift cards to resolve a problem with your account. You need to fix the problem immediately by buying gift cards. In this case, you should report the scam to the U.S. Inspector General's office.


• Job Offer Scams: These scams come out of the cold and offer you a work-from-home job if you purchase a starter package. These are scams because Amazon posts their jobs online, so you will never be cold called. You will also never be required to pay to start working for them.

If you are a merchant who wants to get involved in the fight to help stop gift card scams, then download the signs to put near your registers and gift card displays from the FTC. Alternatively, if you think someone is trying to scam you, then contact the Federal Trade Commission. They will lead you through the process to try to stop these scammers who often build million-dollar empires.