Gift card schemes haven't lost any momentum during a pandemic. Their convenience has turned them into a multi-billion dollar industry. But, once you turn over the numbers on that card, your transaction can't be canceled.
The Federal Trade Commission reports since 2018 gift cards have topped the list of reported fraud payment methods. FTC data from 2020 shows people lost $124 million to gift card fraud.
The Department of Agriculture, Trade and Consumer Protection (DATCP) is trying to prevent the problem. The state agency says it will soon be giving out free signs to retailers so they can place them by their gift card displays. The signs will remind shoppers gift cards are for gifts only and you should never use them to pay someone. The signs are not in stores yet.
"Why are you buying this gift card? If you are buying this gift card to pay the IRS if you're buying it, to pay the social security administration or tech support company, it is a scam, and don't buy it," Lara Sutherlin with DATCP.
Sutherin says the state agency is partnering with Walmart, the Wisconsin Grocers Association, the Pharmacy Society of Wisconsin, and the Wisconsin Petroleum Marketers & Convenience Store Association, to hang up these free signs.
"In the event that something bad happens, it's a stolen card, or it's a fraudulent thing, you don't want it to reflect on that shopping experience that they had in your store," said Brandon Scholz with Wisconsin Grocers Association.
Scholz with the Wisconsin Grocers Association says the simple warnings are a means to protect the customer and keep their trust.
He says cash is no longer king and it's not unusual for shoppers to use prepaid cards for purchases.
"Alerting them to fraud, alerting them to what someone may do, may try and get from them, is always a good thing," Scholz said.
"You think it makes sense not to do it but there are some people who get frightened or confused or they're not familiar with these scams, and they actually do it," Sutherlin said.
It's worth reporting because these agencies rely on consumers' complaints to fight fraud.
Read more about gift card fraud here.