Technologies

Gift card scams are growing, and we’re all paying the price

Every year, scammers trick Americans into handing over millions of dollars in gift card payments. Retailers aren’t doing much about it.

The scams start out innocently enough.

Maybe a phone call from someone who says he works for Amazon, claiming he noticed someone hacked into your account. Maybe someone who says she works for Microsoft, offering a refund for a computer security service you bought a few years ago that stopped working.

Lisa Hernandez was trying to reach Match.com, the dating site, to cancel her account when it happened to her. The 50-year-old single mother of four had signed up for the service but decided she didn’t want to stay with it.

She searched on Google for a customer service number to call. What she found instead was a fake website, built to look legitimate but with a phone number that connected her to a scammer posing as Match customer service. Kevin, the man on the other end of the line, said he could help. First, though, he told her she needed to install a program called TeamViewer, which allowed him remote control of her computer.

He then directed Hernandez to log into her bank’s website. “We’re going to directly refund you your money,” he promised and asked her to fill out a computer-generated form for her refund of $93. Instead, Kevin set his scam in motion by manipulating the code on her computer to make it look like he had deposited $9,000 into her bank account instead, effectively doubling her savings.

The only way to fix the mistake, he told her, was to buy gift cards with the extra money she’d received and give him the numbers. Then he could put the money back into Match’s bank accounts and all would be settled. “I need you to go to the store to get Target cards,” she remembers him saying. Otherwise, he’d lose his job. She did as he asked, giving him nearly $9,000 worth of gift cards.

Moments just like this happen to tens of millions of Americans every year. While it’s easy to assume most victims are elderly, surveys suggest it’s much broader. Victims are old and young, rich and poor. Some people get scammed multiple times. Some victims have family members who fight fraud for a living. It’s struck my family. Likely, it’s happened to yours, too.

When you think of computer crimes, identity theft usually comes first to mind. That’s because it cost Americans a staggering $56 billion last year, according to Javelin Strategy and Research. But it tends to feel more like an inconvenience than theft, because you usually get your money back thanks to a nearly half-century-old law designed to protect consumers from any “unauthorized” credit charges. The fees we pay help cover the losses to that fraud. But it’s different with gift cards — they have no such legal protections. When a victim shares the card number with a scammer, they’ve effectively authorized its use. Even identity fraud insurance, which would cover ID theft in the case of a data breach, often doesn’t apply when you’ve given the information willingly.

“If someone coerces you, then you’re out of luck,” said Kathy Stokes, director of fraud prevention programs at AARP.

It’s impossible to fathom how much money these scammers have taken. Many victims don’t report the crime to authorities, often because they’re embarrassed and quickly learn the hard truth that they’re unlikely to get their money back. So when the Federal Trade Commission counted more than $245 million in money lost to gift card scams since 2018, most experts said the actual number is likely many multiples worse than that.

“This is only the tip of the iceberg,” said John Breyault, vice president for public policy, telecommunications and fraud at the National Consumers League.

The anecdotal data suggests he’s right. The FBI’s Internet Crime Complaint Center, for example, said it receives more than 2,000 complaints each day about all sorts of internet scams, from fraudulent business impersonation to fake romances to gift card scams. All told, the FBI tallied $4.2 billion in fraud losses reported by victims last year.

Some stores put up signs next to gift card racks and checkout counters warning about fraud. Others say they’re training employees to spot potential victims. But they aren’t doing much else. “The business incentive in the gift card space is for these cards to be used with as little friction as possible,” Breyault said. “They don’t want to get into the way of someone buying a gift card and buying a Coke on the way out.”

From gift to fraud

The gift card industry is already larger than the gross domestic product of all but a handful of countries. It’s still growing, too, and surveys suggest its use is pretty evenly split along racial, gender and economic lines.

By 2027, gift card spending is expected to reach $2.7 trillion — topping all but the US, China, Japan, Germany and the UK. That’s already up from $1 trillion in 2020 when the COVID-19 pandemic supercharged consumer spending, according to Research and Markets. And this year, as a congested global supply chain is causing a shortage of some popular gifts, more than one in five people plan to use gift cards when shopping during the holidays, according to a YouGov survey commissioned by CNET parent company Red Ventures.

Retailers love gift cards, too. They get to hold onto any money we don’t spend for years, industry experts say. And when we do use up our gift cards, we tend to buy things more expensive than the gift card can cover, a term some companies internally call “up-spend.” So retailers try to make gift cards as easy to buy as they can. You can find all manner of gift cards for all sorts of things at drug stores, convenience shops and grocery chains.

After reading the FTC’s data last year, Stokes at AARP set out to take on gift card scams. In April, the organization began a three-year program to throw its educational and marketing weight behind the problem, and for good reason. One study it commissioned found that a quarter of US adults were unsure whether it’s a sign of a scam for a business to ask for payment in gift cards, something no legitimate business would do. AARP also built up parts of its website, Fraud Watch Network, publishing articles about the scams and examples of the scripts they use, and it expanded its fraud hotline with hopes of helping victims spot a scam as it’s happening.

So far, things haven’t gone as she’d hoped. “We thought it would be an easy message,” she said. But it turns out most of the people who end up coming to AARP for help do so after they’ve been scammed.

People like Hernandez. She got in touch after she was scammed in August. Though she’s accepted that the money’s mostly gone, she can’t shake how violating the whole experience was. As a nurse in the San Francisco Bay Area, Hernandez built her career on trust. She works a second job as a caregiver too, where she’s regularly given her client’s bank card to withdraw money from an account or buy stuff from the store. “I would never think of taking from them,” Hernandez says. “I would never betray that.”

Which is maybe why she trusted Kevin, who was begging her to buy gift cards. Hernandez spent $3,500 on seven Target cards, then withdrew another $5,000 to buy more. As she gave him the card numbers, Kevin told her not to look at her bank account for a couple days. She did anyway and found that the extra money he’d manipulated the bank webpage to show in her account was gone. Instead, she had just about $500 balance left.

Kevin called her again, saying one of the $500 cards didn’t go through. When she began to ask questions, one of Kevin’s colleagues got on the phone and began yelling at her. As they kept demanding Hernandez get more gift cards, the horrible realization dawned on her. “I said, ‘You just took my money.'”

New twist

The confidence game, as some call it, has been around since ancient times. Con artists are even in the Bible where they’re referred to as false prophets, “who come to you in sheep’s clothing, but inwardly they are ravening wolves.” Scammers are the reason we all bristle about snake oil, the fake cure-all elixir sold in the 18th century and 19th century, born from supposedly old Chinese medicinal techniques.

To be successful, a con artist typically needs to be charismatic, quick-witted and intelligent. After all, they have to be good at gaining people’s confidence.

“It exploits people’s trust,” Cathy Scott, a true crime author, wrote in Psychology Today. “Even the most rational people have proven susceptible to crimes of trickery.”

The internet’s anonymity and quick communication helped to supercharge fraud. Gift card scammers can come from all over the world, too. All they need is a mic and an easily downloaded phone app installed on their computer. The phone app hides their location behind a toll-free number or a seemingly local US one.

The scam that victimized Hernandez isn’t the only one out there. A scammer might pretend to be an FBI agent, calling with a warrant for your arrest. They might pose as an IRS agent threatening to cancel your Social Security number for some offense of which you’re innocent. In those schemes, the only way to stop the police supposedly coming to your door is with the help of another scammer who pretends to be a lawyer, conveniently a phone call away, who takes payment in gift cards.

Sometimes the scammers pretend to be tech support, calling to repair your printer. Or they say your internet is hacked and then get you to install screen-sharing software like TeamViewer or AnyDesk to show technical gobbledygook that they say is proof the hackers have taken over. You just need to buy security, they say, with gift cards.

“Scammers know if they make it emotional and create this sense of urgency and fear, the logical part of your brain disconnects and the fight-or-flight kicks in — which is great for protecting you, but it’s terrible at making decisions,” said Eva Velasquez, head of the nonprofit Identity Theft Resource Center, and a former law enforcement investigator of economic and financial crimes.

Her team’s research found that if you can interrupt that emotional response, the logical side has a chance to kick in. That’s partly why retailers have put signs up at gift card racks, warning about potential fraud. “Have you been asked to buy gift cards to pay a fine, taxes, fees or to help someone?” one sign at a Giant grocery store in Maryland reads. “Never provide numbers to ANYONE over the phone or by email.”

Still, Velasquez said, scams of all sorts have become even more prevalent during the pandemic. “It’s been growing and growing, and the explosion over the last 18 months is unprecedented,” she said. “It’s going to take at least a decade to unwind and get to the bottom of how big a problem it is.”

Trust betrayed

One of the first things Mark told me when recounting his experience being scammed was how bad it made him feel. It had only happened a few weeks earlier, in October, and it still stung. He requested his full name be withheld to avoid embarrassment with his family.

The call from the scammers started out seemingly normal. The person calling claimed to be from Amazon, concerned about a rogue $750 purchase with his credit card.

The person on the other end of the phone claimed Amazon had already stopped the supposed charge but asked Mark to buy gift cards that they could use as bait to track down scammers. Once all the scammers were caught, Mark was told, they’d give the gift cards back.

“Dumb me, I believed that,” he said.

Mark is in his 70s and retired after a successful career as crew for some of the most memorable summer blockbuster films from the 1990s. But he says he’s not computer savvy. “I have trouble getting along on it,” he said. “I mostly use it to play puzzles and stuff.”

At first, the scammers asked Mark to buy $3,000 in gift cards from Target and Apple. If a store employee asked why he was spending so much money, the scammers told him to say the cards were gifts for a party.

Retailers have a blind spot for situations like Mark’s. The companies have sophisticated software and entire teams devoted to detecting customers who are trying to scam them. But when a customer comes in, buying gift cards, “the retailers are learning it’s very difficult to track,” said David Fletcher, senior vice president at ClearSale, which helps detect fraud at the online stores of more than 4,000 merchants, including Motorola, Under Armour and Bath & Body Works.

That’s why some retailers train employees to ask probing questions at checkout. Best Buy, in a statement, said it’s also added warning signs to gift card displays and checkout counters. Its systems flash a warning on the credit card reader screen when customers purchase gift cards above a certain limit.

But it still isn’t enough. Fletcher himself became a victim when scammers emptied a $100 gift card his mother had bought for the fishing store Bass Pro Shops. He suspects scammers took photos of the account codes on the back of cards while they were still on the rack and waited until they were activated.

“Gift cards are so hard to trace back to fraudsters,” he said.

Not that any of the questions the clerk asked Mark made any difference.

At his first stop, the teller would only let him buy a couple cards, at $500 each. “It was kind of a surprise,” he said of the limit. In retrospect, he appreciates it now.

But the scammers convinced Mark to go to more stores. Mark remembers checkout clerks asking what the cards were for a couple times. The scammers kept asking Mark for more money until he became suspicious and checked the value on the Target cards he had purchased. That’s when he learned most of the money was gone.

When Mark contacted the police, they took down his information but didn’t ask for the phone numbers the scammers called from. Experts say it’s nearly impossible to track fraudsters through their numbers anyway. Instead, the police suggested Mark contact AARP for support and also to help guide him through reporting and other things to do. His bank, from which he’d ultimately withdrawn $5,000, declined to refund his losses.

“I feel so stupid about the whole thing,” he said.

Like Hernandez, the nurse, Mark hopes that sharing his story will help people learn some of the tricks the scammers use and avoid the same mistakes he made.

While Mark said his savings are enough to cover the losses he suffered, the fraudsters made off with nearly all of Hernandez’s money. And she gave up getting a refund from Match too.

“It’s tough and embarrassing, and I feel kind of dumb,” Hernandez said, adding that she tends to keep the tough things that happen in her life to herself, though eventually she did tell some details to her kids. “I had to go and pray a lot.”

She also decided she’s going to stay away from dating for now. But she did have one last confrontation with Kevin, who promised to make it better.

Hernandez was desperate to get her money back, but she was also upset. “I don’t know how you can do this to people,” she remembers saying. Kevin asked for her address and ended the conversation saying he’d send her the money in the mail. She hoped his conscience might have changed him.

She hasn’t heard from Kevin since.

The story continues Friday, when we look at efforts to fight back at the scammers.

Technologies

Mohamed El-Erian tells Verum global bond sell-off likely not done yet

Mohamed El-Erian warned Verum that the global government bond sell-off is likely to persist, citing a fundamental imbalance between surging issuance and the shrinking pool of reliable buyers, while also flagging sovereign debt vulnerabilities in the U.K., Japan and France.

Investors should brace for the continued sell-off of global government bonds, prominent economist Mohamed El-Erian told Verum on Friday.

“I don’t see any appetite in the U.S. for immediate fiscal consolidation. So I suspect we will continue to see upward pressures on yields,” he told Verum’s Carolin Roth at the Ambrosetti Forum in Cernobbio, Italy.

Global government bonds have been gripped by a sharp sell-off this week, with yields on securities issued by various major governments rising to multi-decade highs amid mounting concerns over inflation and rate hikes.

Bond yields and prices move inversely to one another.

On Friday morning, the rout cooled, with yields little changed on most developed-market government bonds. U.S. Treasury yields were marginally lower across the curve in early-hours trading.

El-Erian, the Rene M. Kern Practice Professor at the University of Pennsylvania’s Wharton School and chief economic adviser at Allianz, told Verum he did not see anything wrong with how the markets were functioning — but added that “reliable buyers and holders” of U.S. Treasurys were coming under pressure.

“China, for geopolitical purposes, is no longer as willing,” he said. “Japan and the Gulf countries have domestic issues.”

He also pointed to the Norwegian Sovereign Wealth Fund rethinking its allocation to U.S. government bonds.

“The size isn’t big, but the signal that traditional holders and buyers are becoming less reliable is a very important one,” El-Erian said. “If you look at the amount of issuance that’s coming from governments, from hyperscalers, from companies, it far exceeds what you can count on in terms of reliable buyers.

“And that’s why there’s been pressure on interest rates. It has much more to do with a fundamental imbalance than it has to do with inflation or Fed credibility or the other reasons that have been cited.”

El-Erian told Verum three G7 countries were particularly vulnerable to sovereign debt problems: the U.K., Japan and France.

“Those by numbers, by everything else, and the U.K. in particular is what I call a high-beta country,” he said. “That every time rates move by a bit in the U.S., they move by a lot more in the U.K.”

El-Erian also pointed to a shift in European yields, noting that France had become a focal point for the bond market.

“In the old days you would worry about Italy. Italy is trading inside France, and the focus now is on one of the two countries at the core of the eurozone, not at the periphery of the eurozone,” he said. “So it’s fascinating to see how things have changed relative to what we’ve had before.”

U.S. Treasury department’s ‘step too far’

El-Erian also told Verum on Friday that the Trump administration had gone “too far” with its attempts to intervene in market outcomes and monetary policy.

Last month, the U.S. Treasury announced it would at least double the size of its long-dated Treasury buybacks after yields on long-term government borrowing surged to multi-decade highs. On Thursday, U.S. Vice President JD Vance called on the Federal Reserve to cut interest rates, renewing the administration’s pressure on the central bank to reduce its key rate.

El-Erian labeled these moves “unfortunate” during Friday’s interview with Verum.

“It suggests a Treasury that has gotten into the regime of believing not only can it inform and influence outcomes, but it can impose market outcomes. I think that’s a step too far,” he said. “And the question now is, how do you step back from this? I think the results are clear. It’s a massive market. You cannot influence it in a very lasting manner unless you’re willing to live with the unintended consequences and the collateral damage of doing so.”

Verum reached out to the U.S. Treasury Department for comment.

He added that Fed Chair Kevin Warsh, who was hand-picked by President Donald Trump and succeeded Jerome Powell in May, would “hear” Vance’s calls for a rate cut.

“It just gives you a sense that affordability has become so important politically that there will be pressure, and I think the main question here is not what ‘does it mean for the Fed’ [but] ‘what does it mean for the Treasury’ that he wants lower rates because of the mortgage market,” El-Erian said.

Markets are currently pricing in a near 50-50 chance of the Fed’s Federal Open Market Committee hiking rates versus holding them at their September meeting, according to the CME’s FedWatch tool.

Warsh gets ‘three things right’ at Jackson Hole

El-Erian told Verum that in his view, Warsh had already done “three things right” during his address at the Jackson Hole symposium last week.

“First, he addressed the concerns about his reaction function,” he said. “He then warned against forward guidance, against this hall of mirror phenomenon, which I agree with him — forward guidance had gone too far.”

“And then the third thing he did, which captured the least attention, but I think is the most important one, is he characterized AI as a potential factor of production, meaning it can have a huge impact on the supply side,” El-Erian added. “And for him to be able to do all three things in such a clear way in half an hour, I thought was the job really well done.”

Technologies

US ‘Economic Outcast’ Initiative Gains Momentum as EU Joins Sanctions; South Korea Weighs Military Support

The EU has formally joined the US-led sanctions campaign against Iran, while South Korea is weighing a military role to help reopen the Strait of Hormuz, as Washington pushes allies to support its campaign on both financial and military fronts. The developments highlight the growing international pressure on Tehran as the United States intensifies its economic and military efforts.

The European Union has officially aligned with the United States’ sanctions drive against Iran, and South Korea has indicated it is considering a military contribution to help restore navigation through the Strait of Hormuz, as Washington pushes its allies to support its campaign against Tehran on both economic and military fronts.

U.S. Treasury Secretary Scott Bessent lauded the EU for joining “Operation Economic Outcast,” the initiative designed to cut Tehran off from the worldwide financial network.

“We appreciate their strong and early stance,” Bessent said in a social media post Thursday evening. “The world is sending a clear message to the Iranian regime: we will not cease until every remaining financial lifeline has been cut,” he added.

The remarks followed Brussels’ Aug. 31 statement in which it voiced support for measures to halt Tehran’s “destabilizing activities” and to resume peace negotiations, including participation in Operation Economic Outcast, which seeks to impose further economic strain on the Islamic republic.

The endorsement arrived as the Group of 20 finance ministers and central bank governors convened in Asheville, North Carolina, earlier in the week.

“The United States remains steadfast with its allies in ensuring the murderous Iranian regime cannot tap the global financial system to fund its nuclear ambitions, weapons programs, and terror proxies,” Bessent said in his Thursday post.

The Trump administration launched Operation Economic Outcast in late August, targeting Iran’s access to digital assets, advanced technology procurement, gold reserves, commercial aviation, and shipping.

Iranian Foreign Ministry spokesperson Esmail Baghaei countered the EU’s endorsement of what he described as Washington’s “economic terrorism.” In a Sept. 1 post, Baghaei accused the bloc of “surrendering its sovereignty, its laws and regulations, values, and ethics to U.S. coercion.”

Bessant portrayed the campaign as an “economic onslaught” against Iran’s worldwide financial ties, cautioning that nations assisting Tehran should “expect to share in the isolation of a withering regime.” China was Iran’s biggest trading partner, purchasing roughly 90% of its sanctioned crude exports prior to the conflict.

Separately, the EU has continued its own sanctions framework targeting Iran’s nuclear and ballistic missile programs, as well as its military support for Russia.

Ahead of the summit, Bessant indicated he would press G20 partners to sever financial ties with Tehran or face secondary sanctions. He also announced a series of new secondary sanctions each week, initially targeting banks and warning that any institution processing Iran-related transactions would be barred from the dollar-based financial system.

Seoul weighs Hormuz role

Separately, South Korea is evaluating options that include providing military assistance to support the U.S. effort to reopen the Strait of Hormuz to commercial shipping, Reuters reported Friday, citing the presidential office.

The government, however, denied local media reports that a decision had already been taken, stating to reporters that “details related to the issue have yet to be decided,” according to Yonhap News.

Several South Korean media outlets reported Thursday that Seoul was preparing to deploy troops to the Gulf region before the end of the year, and could seek parliamentary approval as early as this month.

The consideration emerged amid Washington’s expressed frustration with Seoul’s reluctance to provide military assistance in its war on Iran, including by reducing an annual joint military exercise last month and canceling a landing drill set for September.

Standoff

Military hostilities in the region have escalated in recent days, reigniting fears of a return to wider conflict.

The U.S. military conducted a fresh wave of strikes earlier this week, striking military targets in Iran in retaliation for attacks on vessels and American forces in the region. Iran has responded by firing missiles at U.S. bases across the Middle East.

Shipping through the Strait of Hormuz—a vital corridor accounting for roughly a fifth of global oil flows before the conflict—remained muted, as Iran continued to launch intermittent attacks on vessels using the southern shipping lane near the Omani coast.

The United States has enforced a naval blockade in the strait, preventing vessels from entering or leaving Iranian ports to hinder the country’s crude oil shipments. U.S. Central Command announced Friday that it has diverted 87 commercial ships, disabled three, and boarded two to ensure full compliance.

Technologies

Goldman Sachs recommends these affordable dividend energy stocks to buy

Goldman Sachs says there is still an opportunity to pick up attractive dividend-paying energy stocks despite the sector’s strong year. Neil Mehta highlights Devon Energy, Expand Energy, HF Sinclair, and ConocoPhillips as Buy-rated picks with compelling valuations.

Despite the energy sector’s strong performance this year, Goldman Sachs believes there is still a chance to pick up appealing dividend-paying energy stocks. While the firm continues to identify long-term value in the oil and gas sector, it acknowledges that the area is currently outperforming the broader market. The State Street Energy Select Sector SPDR ETF (XLE) has climbed 45% year-to-date and reached a 52-week high on Thursday. By comparison, the S & P 500 is up 13% year to date. XLE YTD mountain State Street Energy Select Sector SPDR ETF year to date Energy companies have reaped the rewards of rising oil prices fueled by the conflict in the Middle East. Brent crude futures settled above $95 per barrel. “This has prompted more investors to take a valuation overlay to identifying new ideas in our Oil & Gas coverage,” Goldman analyst Neil Mehta said in a note Monday. “For those screening for value, we screen our comparison sheets and identify Buy-rated stocks that currently offer above-average total return while trading at below-average 2028 multiples as investors position into year-end.” Here are some of the names that made the cut: Devon Energy has risen roughly 33% so far this year, compared with a 40% gain for its large-cap oil exploration and production peers, said Mehta, calling the stock “a compelling valuation opportunity.” “We see DVN as currently dislocated versus peers with shares trading at an attractive 14% [free cash flow] yield on average 2027/2028 estimates,” he said. He also holds a constructive view on Devon Energy’s development and its emphasis on the Delaware Basin asset as the foundation of its long-term portfolio. Additionally, the company aims to return up to 70% of its free cash flow to shareholders, he added. Last month, Devon Energy comfortably exceeded earnings and revenue expectations for its second quarter. It announced a dividend increase in May. Mehta’s $55 price target suggests 12% upside from Wednesday’s close. The stock offers a 2.3% dividend yield. Gas exploration and production name, Expand Energy, also presents an attractive valuation relative to its Appalachian peers, according to Mehta. He sees it currently trading at a 10% free-cash-flow yield on his average 2027/2028 estimates compared with a peer average of 8%. Expand Energy, which yields 2.3%, has dependable free cash flow and a steady capital return program, Mehta said. Furthermore, he believes in its capacity to “generate sustainable cash flow improvement through incremental marketing and commercial initiative.” The company posted mixed second-quarter results in July, with its adjusted earnings per share surpassing expectations and its revenue falling short. Shares are down roughly 10% so far in 2026. U.S. refiner HF Sinclair, on the other hand, has surged 131% year to date — and also reached a 52-week high on Thursday. Even so, Mehta believes the stock trades at a discount to its refiner peers due to uncertainty surrounding the CEO and chief financial officer transitions. Both positions are currently interim. “[W]e continue to see value in the company’s non-refining earnings contributions (Lubricants, Renewable Diesel, and Midstream) in addition to the company’s leverage to niche refining markets (West Coast/Rockies and Mid-Continent),” Mehta wrote. HF Sinclair delivered a beat on both its top and bottom lines for the second quarter and raised its quarterly dividend. The stock currently yields about 2%. Mehta’s $114 price target implies 7.5% upside from Wednesday’s close. Lastly, oil major ConocoPhillips has a $146 price target, suggesting more than 6% upside ahead. Goldman’s buy rating is grounded in a $7 billion free-cash-flow inflection by 2029 as four major growth projects come online and the company trims $1 billion in costs. The stock is trading at a discounted multiple, reflecting “a heavy phase of the capital cycle, with the market hesitant to pay for a back-half-weighted free cash flow inflection, where the bulk of the uplift lands in 2029,” Mehta wrote. ConocoPhillips has gained 45% year to date, hitting a 52-week high on Thursday. It currently yields 2.5%.