Unwanted gift cards? Resolve to steer clear of gift card resale scams

Millions worth of gift cards go unused. Re-selling unwanted cards is an attractive option, but beware fraudulent buyers.

Gift cards are a popular and convenient gift idea, so it’s no wonder that nearly $27 billion in gift cards are purchased by Americans during the holiday season. For whatever reasons, nearly $1 billion worth of those gift cards go unused by their recipients each year, and there’s even a market for buying back unused gift cards at discounted prices. But, be careful if you intend to sell back an unused card--or else you may fall victim to a gift card resale scam.

Each January at Fraud.org, we see a spike in scams involving the resale of gift cards. In a typical scam, a consumer will attempt to sell their unused gift cards on eBay or Craigslist. Once they find a buyer, they email the codes on the back of the card, and the buyer pays them.  However, unbeknownst to the seller, the fraudulent buyer will cancel his digital payment as soon as he receives the codes and quickly spend the card’s funds--leaving the seller without any payment and with a depleted gift card.

While gift card resale fraud is a concern, you don’t have to be saddled with an unwanted gift card if you have no need for it. Legitimate merchants have started to help consumers sell their cards safely.  If you follow our tips, you should be able to buy or sell on the gift card exchange market without falling victim to fraud.

  1. Know the market. With a legitimate gift card exchange, the gift card will sell for less than its original worth. If you find a seller that is offering to pay face value or higher, it is likely a scam.

  2. Do not sell to unknown buyers. Avoid selling your gift card to someone you don't know personally. Websites like Craigslist or eBay lack the protections needed to verify that a buyer will not back out on their payment or that the gift card being sold has the advertised amount loaded on it.

  3. Treat your gift card code as cash. Scammers may request that you provide your gift card code so that they can confirm the card’s value. However, as soon as you give it to them, they can empty your card’s funds.

  4. Use legitimate gift card exchanges. If you are not selling to a friend or family member, you should always use a legitimate gift card exchange, such as Cardpool.com or Giftcardzen.com. Legitimate gift card exchanges serve as an escrow service between buyer and seller, offering post-purchase guarantees and payment tracking. Another way to make sure your transaction will be legitimate is to check the Better Business Bureau’s (BBB) complaints for each exchange you are considering, or to use websites like Gift Card Granny to locate the best exchange for your card.

  5. If you are purchasing a gift card, use an exchange that offers balance verification. Make sure the exchange you choose offers balance verification on cards that are for sale. This will assure you that you are purchasing a gift card with the correct amount advertised on it. If the exchange does not offer balance verification, you may be purchasing a gift card with a $0 balance, or a lower-than-advertised balance.

  6. Consider using an in-store exchange or donating your card to charity. If you do not want to use an exchange and you have access to the card’s merchant, you can always trade your gift card in at a store or donate it to charity. Some stores, like Target, allow you to exchange your unwanted gift cards for one of their gift cards. Alternatively, you can try donating your gift card to a charity for a tax write off.

It can be difficult to spot a fraudulent gift card buyer or seller. If you think you may have come across a scam, let us know! Please file a report at Fraud.org via our secure online complaint form. We’ll share your complaint with our network of law enforcement and consumer protection agency partners who can investigate and help put fraudsters behind bars.