The Federal Trade Commission or FTC reports in the first nine months of 2021, 40,000 people reported they used gift cards to pay a scammer. In total, consumers reported losing $148 million. That amount is $24 million more than what was lost in all of last year.
"That's just the folks that are reported it. A lot of us are embarrassed about falling for these scams. So this is really just the tip of the iceberg," said Lara Sutherlin, with Wisconsin's Department of Agriculture, Trade and Consumer Protection or DATCP.
Sutherin says gift cards continue to be one of criminals' preferred forms of payments because once you give them the numbers on the card, chances are slim you'll ever get that money back.
A recent FTC report shows Target gift cards are the most popular choice for scammers.
"For a long time, it was iTunes gift cards and then it switched up from that. It could be that it's a way to keep people guessing," Sutherlin said.
DATCP says they are doing what they can to stop the fraud from happening.
This year, DATCP gave out more than a thousand free warning signs to retailers so they could place them next to gift card displays, reminding shoppers gift cards should never be used to pay someone.
The state agency also trained Walmart staff this year on how to spot gift card fraud. Sutherlin says DATCP will do that for any retailer, big or small. She says all they need to do is ask.
"We're happy to come in on an annual basis and talk about some of the signs of gift card scams and how to prevent it," said Sutherlin.
If you do buy a gift card as a gift, DATCP says to do the following:
1.) Read the fine print on the card so you know the terms and conditions.
2.) Inspect the packaging of the card to make sure any protective stickers are still there.
3.) Don't throw out the receipt. If the person receiving the gift card ends up losing it, at least they have the receipt as a backup.