Gift card scams in Canada: How to stay safe this holiday

* This article is sponsored by Equifax.

If you’re like most Canadians, you’ll likely purchase some gift cards as part of your holiday shopping this year. Canada’s gift card industry is growing fast, with predictions it could rise from about $11 billion in 2023 to nearly $14 billion by 2028.

Gift cards seem like the perfect gift—they’re convenient, flexible, and easy to buy. Unfortunately, they’re also a target for criminals. Gift card scams are on the rise in Canada, and many are convincing enough to trick even the most cautious shoppers.

Retailers are constantly looking for new strategies to stay ahead of these scams and prevent fraud, but there’s only so much they can do. That means the responsibility often falls on consumers. By understanding how these scams work and knowing the red flags to watch for, you can take advantage of the convenience of gift cards with minimal risk.

How gift card scams work in stores

Scammers and organized crime groups have been targeting physical gift cards in retail stores. The method is simple but effective:

• Criminals remove the packaging from around the gift card, record the card number, and carefully reseal it to look good as new.
• Once a card is purchased and activated at the cash register, the scammer drains the balance before the buyer or recipient has a chance to use it.

This type of fraud is hard for stores to stop because the tampered cards often look brand new. While some suggest retailers keep gift cards behind the counter or in a locked display, thieves continue to find ways around every measure taken against them.

The risk with digital gift cards

Digital cards come with their own risks. When a code is emailed or texted, it can be intercepted if shared over unsecured networks or through phishing scams. Once a fraudster has the code, the balance can disappear in seconds.

One of the most common scams involving gift cards starts when an unsuspecting person receives an email or text that looks like it came from their boss or colleague. The message often says something like: “I’m in a meeting and need you to pick up $500 worth of gift cards for a client right away. Please send me the codes, I don’t have time to talk.”

These messages are designed to create urgency and prevent you from stopping to think. The email may even use your boss’s name, but the sender’s address is often fake.

The simple rule: if your boss ever emails asking you to buy gift cards and send the codes, it is almost certainly a scam. Check the sender’s email carefully and always verify the request by calling or speaking to them directly.

How to protect yourself from gift card scams

While the greatest defense against gift card scams is taking the time to look and think critically, there are a few more steps you can take to reduce your risk:

1. Inspect physical cards before buying: Look for signs of tampering, such as damaged packaging, loose glue, or scratched-off PIN covers.
2. Buy cards kept behind the counter: If possible, choose cards stored where customers cannot handle them until purchase.
3. Save the receipt: It can help prove when and where the card was bought if you need to report fraud.
4. Do not share codes by text or email: Treat gift card numbers like cash. Only share them in person or through secure methods.
5. Verify suspicious messages: If someone asks you to buy gift cards, confirm the request by phone before acting.

Gift card scams can happen to anyone, so don’t feel embarrassed if you’re targeted. The important thing is knowing how to respond.

Tips for safe online shopping

Gift card scams aren’t the only risk during the holiday shopping season. Fraudulent shopping websites also pop up every year, aiming to steal your personal and financial information by posing like legitimate sites and publishing advertisements that generate traffic to their ‘dummy sites.’ Once you land on the site and make a purchase, the scammers steal your information.

To avoid falling victim to online shopping scams, take the following steps before entering payment details on any website:

• Check the web address: It should start with “https” and show a padlock icon in the browser.
• Stick to trusted retailers: Be wary of unfamiliar sites offering deep discounts. If a deal looks too good to be true, it probably is.
• Watch for red flags: Poor spelling, low-quality images, or clunky checkout pages can signal a fake website.
• Avoid public Wi-Fi: Shop only on secure networks or use a VPN to keep your payment details encrypted.
  
  Taking these precautions makes it harder for criminals to trick you into handing over sensitive information while purchasing gift cards or shopping online.

Protecting yourself beyond gift cards

All of these schemes open the door to data theft or compromised devices. Once criminals steal your information, they can use it to open new credit accounts, access your accounts, or sell your data on the dark web.

One of the best ways to protect yourself is through a credit monitoring and ID protection service like Equifax Complete^TM Protection. Equifax Complete Protection is a multi-layered credit and cybersecurity service that helps Canadians protect their personal data and respond quickly if fraud occurs. With a single subscription, you can:

• Stay on top of potential risks with WebScan, which looks for your provided personal and financial details on the dark web.
• Protect your web browsing with device security tools and a VPN, helping to keep your connection safe at home or on public wifi
• Get credit monitoring alerts whenever there are key changes to your Equifax credit report that may point to suspicious activity
• Use a password manager to create and securely store complex logins without having to remember them all
• Receive social media monitoring updates if unusual behaviour is spotted on your accounts

What to do if you are a victim

If you believe you’ve fallen victim to one of these scams, report it immediately to the retailer or credit card issuer. Some companies may be able to freeze a transaction if it hasn’t already cleared.

Next, file a complaint with the Canadian Anti-Fraud Centre and contact your local police service. While getting your money back isn’t guaranteed, reporting the fraud helps authorities track patterns and warn others.

If you’re an Equifax Complete Protection customer, you’ll also have access to a dedicated Identity Restoration Specialist to guide you through dealing with creditors and correcting your credit report. This includes up to $1 million in ID theft insurance (not available for new purchases in Quebec) to help cover expenses related to recovering your identity.

The bottom line

All of these scams can put your personal information at risk. Taking proactive steps, like using Equifax Complete Protection, gives you extra peace of mind that your identity is being monitored and supported if fraud does occur.

Gift cards are a thoughtful and convenient gift, but they are also a hot target for scammers. Reduce your risk by checking cards carefully, protecting codes, and staying alert to suspicious messages.

This holiday season, keep the joy in gift-giving and leave the scams out in the cold.

Get more details about Equifax Complete Protection today.

Also read:

• How to protect your online financial transactions
• Data leaks and the dark web: How to protect your identity in Canada
• Is social media putting your identity at risk?
• How to restore your identity in Canada after ID theft