Understanding Gift Card Fraud and Online Rewards Center Scams

All over the Internet you can find offers promising you free gifts and rewards. Sometimes these come in the form of pop up banners that tell you that you are the 1,000,000th visitor to a Web site. Other forms of these scams can be an e-mail with a link inviting you to claim your prize or gift card. The prize may be a free IPod, a $500 gift card to a department store, a gas card or a brand new laptop.
 
Although they claim to be free, these are gift card scams or online reward center scams. To receive the reward, they will usually force you to disclose information, make purchases or recruit others to participate in programs. After working hard to complete the terms in the small print, you may never receive the reward.

How Gift Card and Reward Fraud Works

If you read the fine print, you will see that the free gift card or free reward is contingent upon your completion of program offers, surveys or offer terms. As a result, these gift card scams never really are giving away free money or merchandise.
 
Often, you are asked for your name, date of birth and e-mail address, which the company will use to endlessly bombard you with e-mail marketing ploys. In order to receive your gift, you may be required to make purchases, sign up for magazine subscriptions or apply for a credit card. In many instances, the amount you are required to purchase before receiving the gift may exceed the value of the "free" gift.

Common Types of Rewards Offered

While the types of gifts and rewards advertised in these scams can vary, they usually revolve around whatever items are in the highest demand. Gift cards offered are often for:
  • big name stores (such as Macys, Best Buy, Bed Bath and Beyond, etc.)
  • free gas
  • free meals at popular chain restaurants
  • free music downloads or ringtones.

If merchandise, rather than money, is used as the bait for these scams, the "free" items are frequently expensive electronic goods, including:

  • designer goods (such as handbags and perfume)
  • iphones
  • ipods or other MP3 players
  • laptops
  • video game consoles.

How to Spot a False Reward or Gift Card Scam

Gift card scams or reward scams can come in the form of e-mail solicitations, pop up advertising or in paid advertising links in search engines like Yahoo or Google. These scams are also common on social networking sites like MySpace or Facebook. In some cases, you may even see offers for online reward center scams or gift card scams on Craigslist or Internet dating sites.
 
Here is a list of some Web sites that use false rewards and gift card scams:
  • Freefoodprovider.com
  • Freefoodsource.com
  • Freefuelcard.com
  • Freefuelcoupon.com
  • Freegamessource.com
  • Freegasonus.com
  • Freegasprovider.com.
If you are unsure as to the validity of a gift card or reward offer, check with the Better Business Bureau or the company issuing the gift card. Ask if the promotion is valid and sponsored by the company. If the company issuing the gift card isn't sponsoring the questionable promotion, think twice about it, as you are likely dealing with an instance of gift card fraud.
 
When filling out online forms for a reward, do not disclose personal information, such as your credit card number, social security number, phone number or even your e-mail address. Doing so may cause you to be inundated with spam e-mails, solicitations and other false reward offers.
 
If you do complete all the offers, you may find yourself waiting weeks and months to get your reward in the mail. While you likely will never get your "free" item in the mail, in the worst situation, you may become a victim of identity theft. Fake websites can steal your passwords or credit card number. If you do make a purchase, make sure it is with a secure, encrypted connection.
 
The bottom line is that, if you have to complete offers, wait for others to complete offers or make purchases, the "free" gift is NOT free. Remember, you should never have to pay money for a free gift. Do not pay attention to "testimonials" on a web site because these could be completely made up. As the cliché goes, if a "free" offer sounds too good to be true, it probably is.
 
Resources
 
Lanford, Jim and Audri (n.d.). New Gift Card Scams: 8 Tips to Protect Yourself. Retrieved March 16, 2008, from the Scambusters.org Web site.
 
Lazarus, David (2005). Free iPod--um, not really. Retrieved March 16, 2008, from the San Francisco Chronicle Web site.
 
O’Brien, Terrence (2007). MySpace Scam Offers Free Macy's Gift Card. Retrieved March 16, 2008, from the Switched.com Web site.
 
State of Florida (2005). Internet Company Sued for Deceptive Advertisements of “Free” Gifts. Retrieved March 16, 2008, from the Office of the Attorney General of Florida Web site.