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The gift card accountability sink

128 points by walterbell

by andrewaylett

2 subcomments

One thing I didn't think Patrick quite explored enough: there's a big difference between someone asking you to pay using a gift card and you asking to pay using a gift card.
The examples he gives are predominantly around giving people the option, while the scams are very much pushing a requirement.
If someone wants you to get a gift card to pay them, and won't take cash or credit? Scam. If you have a gift card already and someone's willing to accept it in lieu of cash? Probably no more likely to be a scam than any other vendor?

by alwa

3 subcomments

> This is exactly the behavior that “never happens from a legitimate business” except when it does by the tens of billions of dollars.
> As Bits about Money has frequently observed, people who write professionally about money—including professional advocates for financially vulnerable populations—often misunderstand alternative financial services, largely because those services are designed to serve a social class that professionals themselves do not belong to, rarely interact with directly, and do not habitually ask how they pay rent, utilities, or phone bills.
This resonated for me, and reminded me of the way I and my formally-banked and formally-employed colleagues sometimes struggle to wrap our minds around payday lending (sure looks like usury from the security and comfort of a formal banking relationship!), remittances, hawala, pawn shops, Cash App, gift card exchanges, video game economies… for all the normative thinking in the professional classes, people sure do develop a kaleidoscopic array of approaches to storing and transmitting value.
“Just sanction [whoever]” or “just debank [whoever]” sounds to certain circles like an appealing tool to have—the modern equivalent of exile—but I have to imagine it’s probably healthy that such a tactic is hard for a state actor to apply in a totally watertight kind of way.

by bsder

1 subcomments

If I were the AARP, I'd go further.
"Don't buy gift cards. Full stop."
The general scamminess around gift cards is far too high from all angles.
Anyone asking you to pay them in gift cards is a problem. The gift card processors have all manner of ways to preserve the float by flagging "fraud" in order to suspend your gift card until you waste time and give them personal information. The company behind your gift card can go bankrupt (see: Bed, Bath and Beyond and Fry's). And, finally, as we found from Apple, even redeeming a card can cause you problems.
Give cash. In spite of some hoity-toity nitwits who consider cash to be gauche for gifts, at no point in my life have I ever be disappointed to be given cash.

by andrewaylett

1 subcomments

It's interesting (to me, at least) to see the kinds of discounts that folk apply to gift card transactions. It's not unheard of for a colleague to end up with a gift card they can't use, and while there's a real sense in which the card is worth its face value, there's also a sense in which its restricted use makes it worth less than face value. Plus, if you want to spend £x in a shop then you don't normally need to buy a colleague's gift card.

by raw_anon_1111

2 subcomments

I have started new jobs twice once in 2023 and once last year and before my first day on the job I got a text from the CEO of the company asking me to buy gift cards for them and they couldn’t do it themselves because they were in a meeting.
They said the CEO by name and texted my number. Of course it was a scam that had nothing to do with my CEO. I wonder how they got my number?

by defrost

2 subcomments

Simon Dean did a 14 minute break down:
Is This Australia’s Most Easily Hacked Gift Card? https://www.youtube.com/watch?v=oBarXDL23hs
of how thieves were abusing gift cards by imaging them in stores, waiting until purchased and "holding" value, then extracting that value with a little bit of cracking bad security

by hannahstrawbrry

0 subcomment

For as much as this article harps on the "AARP Lie" i.e. how gift cards can be used by "unbanked" customers on "alternate financial services platform" the first thing I advise seniors to do is AVOID those platforms because of the same exact lack of regulation problem. Paypal and Venmo might give you the run around when it comes to your money but banks don't have that kind of option.

by Spooky23

3 subcomments

I always felt that gift cards are the underbelly of the economy. I don’t think that’s an accident, these things are great ways to move money and pay casual labor without the red flags that cash throws up these days.

by zitterbewegung

0 subcomment

This might be why Apple Gift cards can lock you out of iCloud [1] since they are using a 3rd party. People at Apple who are intermediaries have strict rules not to unlock due to fraud and those processes can’t be undone easily?
[1]https://hey.paris/posts/appleid/

by andy99

2 subcomments

What is the core argument why a gift card would ever be used instead of cash?
I can see if someone didn’t have any money and had a card and wanted to try and sell or exchange it, otherwise? Cash might have some limitations but none that are worse than a gift card.

by citizenpaul

3 subcomments

Gift cards are one of the dumbest most brain-dead pieces of scam ever invented. With all kinds of restrictions that resemble "scrip" type payment systems. They only exist to increase a larger entities control over you.
Why take perfectly good cash and change it to something worse in every way? I cannot understand why so many people enthusiastically go out of their way to buy gift cards. Can you take my cash and convert it to something with the same function but with all kinds of restrictions and gotcha's? Sure no problem....

by zimpenfish

0 subcomment

> It surprises many people to learn that the United States aggressively defends customers from fraud over some payment methods
I feel like that needs a "(currently but not for much longer)" caveat[0] to avoid being wildly disingenuous.
[0] https://www.politico.com/news/2025/11/11/trump-administratio... - "the CFPB [...] anticipates exhausting its currently available funds in early 2026.”

by kelnos

1 subcomments

Oof. Of course Patrick is right that paying by gift card isn't always a scam, but I think less-technically-savvy people are better off just believing that it is. And hell, as a technically-savvy person, I will just believe that it is as well, because it's less effort to do so, and won't hurt me to believe that. If someone wants you to pay for something by gift card, find the same or a similar product somewhere else, where they'll take credit/debit cards, checks, cash, whatever is actually legal tender and is appropriate for the situation.
But from Patrick's description, it feels like the situations where it's (usually) not a scam are instances where paying by gift card is an option, not something the "seller" is pushing you hard to do, or even requiring you to do. That seems... okay? I personally would still pay with a credit card, but mayyyybe it's ok for someone who can't get a credit card to go the gift card route. But I would still be wary.
If you're dealing with an unbanked business that cannot take credit/debit cards or checks due to the legal climate around their business or product, then you probably already know what you're getting yourself into. (But still, bit of a red flag if they don't accept cash or even cryptocurrencies, as much as I find those scammy as well.)
> The people of the United States, through their elected representatives and the civil servants who labor on their behalf, intentionally exempt gift cards from the Reg E regime in the interest of facilitating commerce.
This sort of phrasing about things kinda annoys me. Yes, "through their elected representatives...", technically true, but "the people of the United States", no, not really so much. I'm sure most people don't even know about these sorts of differences, and I'm sure the majority of people who are in favor of these sorts of protections on credit/debit cards would want them to apply to gift cards as well.
The problem with this sort of phrasing implies that the American people actively chose this, or even had any choice in the matter. We are limited in the political options that are put before us; we don't get a big menu of policy positions, check off the ones we like, and then a politician appears that matches all our preferences. Some people might -- very reasonably! -- prioritize other policy positions over gift card protection regulation, even if they want the latter as well.

by stevage

1 subcomments

> . Paysafe, for example, is a publicly traded company with thousands of employees, the constellation of regulatory supervision you’d expect, and a subsidiary Openbucks which is designed to give businesses the ability to embed Pay Us With A Cash Voucher in their websites/invoices/telephone collection workflows.
Fascinating footnote.

by 01HNNWZ0MV43FF

0 subcomment

> very likely made it impossible for anyone at BigCo to reconstruct what happened to a particular gift card between checkout and most recent use.
Could I improve my own privacy posture by just buying myself gift cards, if I can't use cash? Or that's just pushing all the data that the store would get onto the gift card company?

by VikingCoder

1 subcomments

Just out of curiosity, what happens when you buy a gift card for Toys R Us or Red Lobster or K-Mart, and then the company goes out of business?

by devinprater

0 subcomment

A ton of studies colleges/universities/corporations do on blind people give gift cards as payment. Usually $20 or so for a good 40 minutes of time.

by analogpixel

6 subcomments

> The American Association of Retired People (AARP, an advocacy non-profit for older adults) has paid for ads on podcasts I listen to. The ad made a claim which felt raspberry-worthy (in service of an important public service announcement), which they repeat in writing: Asking to be paid by gift card is always a scam.
>Of course it isn’t. Gift cards are a payments rail, and an enormous business independently of being a payments rail. Hundreds of firms will indeed ask you to pay them on gift cards!
That’s where I stopped reading. The author seems more interested in being contrarian for clicks than in giving practical advice. AARP is right here: being asked to pay by gift card is a major red flag, and unless you know the company personally, it’s time to walk away.

by nacozarina

0 subcomment

gift cards are one of those odd legal things with contraband-grade hazards, not worth it, I abstain

by tomjen3

0 subcomment

I am going to disagree with patio11 here. If someone asks you to pay with gift cards, its a scam.
Gift cards are the equivalent of buying dollars at 105 cents, but its not a scam, since everybody is upfront about the transaction.

by silexia

0 subcomment

America needs a Great Firewall for border security. Almost all scams and spam originate outside our country, and are out of the reach of our law enforcement.
We don't let terrorists and robbers wander in, why do allow the digital equivalent?