I was discussing different scam techniques I have heard of/seen with my husband the other day. I wondered out loud… “what do these guys do with iTunes or whichever gift cards they get?” Obviously they are not shopping at the Apple Store?
He said they have a way to get the money out of them, but didn’t know how it worked. I assume he’s right… now I am curious how does this happen, and why can’t apple or google make it harder for the scammers to use their gift cards?
EDIT – lots of good explanations! I was talking specifically about gift card scammers who convince their victims over phone/email/text to purchase gift cards and send them the activated codes. TIL there are many ways to use gift cards to scam ppl.
In: Technology
The way they get them at first is steal them before activation, record the card number and key, then apply a replacement cover for the key, take those cards to the store and place them on the rack. Monitoring of those numbers via the check balance pages begins.
The customer buys the card and activates it, eventually (unless the customer spends it first) the other party will see the money is present, then go to buy other gift cards from safe sources. Those cards are then listed on various places for sale.
Whenever you see a third party selling gift cards at a discount it’s usually one of a few things. 1) A thief like noted earlier, 2) Grey markets, but this is more for software and games than currency cards, 3) Someone trying to make a store discount work at scale, similar to Target giving a discount if you buy using your target card.
You can sell gift cards online – there’s a few websites that do it. Nothing shady. You just type in the gift card info and they send you money in exchange, while taking a percentage. If you have a $50 gift card, you’ll probably get like $40 of it in cash. It’s legit – I’ve had to do it a few times when I was in a pinch 🤷
They have gift cards. They buy high value, easy to resell items with those gift cards (expensive electronics, etc) and sell them for deep discounts to launder the money. Or just cash them out on gift card resale/trade sites.
Its why if you see someone selling “brand new” iphones, macbooks, whatever on craigslist for an obscenely low price, it’s a scam. The items may be legit, but they’re selling so cheap because they’re laundering money. Lot of “work from home and make easy money” scam jobs too where they hire unwitting people to act as shipping intermediaries to help legitimize their online sales (i.e. it’s now coming from a US based address in the suburbs instead of some third world country.)
Doesn’t matter that they’re immediately losing like 50% of the gift card “value” because it’s all raw profit anyway.
You might find [this article from ProPublica](https://www.propublica.org/article/walmart-financial-services-became-fraud-magnet-gift-cards-money-laundering) very interesting and informative.
I honestly wonder if this is where some of the “cash prizes” come from in those scammy play to win Android “games.”
If we reduce your question to “why can’t companies reduce their sales to help random people avoid being scammed”, the answer becomes more obvious.
Companies could *definitely* stop them but it would cost money and share holders don’t like that.
As to how they convert the gift cards to cash, there are websites that specifically do this. There are completely legitimate “exchange” websites where you can exchange your gift cards for other gift cards or for just a cash value. As an aside, you can use this too if gram gram got you a gift cards for a store you would never go to, but you want the cash.
Some of the value of the card is lost, like let’s say you can sell a $50 Amazon gift card for $45 cash. The less desire the gift card the less money you’re going to get for it.
You just need the gift card number, so that’s why scammers tend to gravitate to using them. Simply sending them the gc number is basically the same as instantly sending the cash, right over a phone call or text message. They don’t need the physical card, they just need the numbers. And gift cards are basically the same as cash anyway. Nice and anonymous
For apple store and Google play gift cards, they’ll have a fake app or game on the app stores for $5-$50 with a bunch of in-app purchases. They’ll then use the gift cards to buy those apps and in-app purchases where the money will be put into an actual bank account that they control. Or they’ll make a song or album and put it on the applestore and what used to be the Google music store and just buy that over and over again. No one will care about some music that came from a small country with no internationally recognized artists or bands.
For stores like Dicks, Macy’s, box-stores or items that you can ship in a card board box across the country or internationally, they’ll buy actual merchandise with them and sell them on Etsy or ebay or elsewhere.
Last is they’ll just sell the numbers online for cheaper than what it’s worth. They didn’t buy them so whatever they make on them is pure profit. Say your grandma sent them a gift card for $500. They’ll sell the code online for $200 and male $200 off of it.
None of the businesses that sold the gift cards care because they already received them when the scammed person bought them, so it doesn’t cost apple, Google, Macy’s, Dicks any money at all.
Every group or individual is gonna have their own version but the 2 I commonly see are a. Setting up an online store and selling the item at a discount. Or b. Reselling the gift card to a 3rd party who is “innocent”
Companies have a hard time with the latter due to scale and level/reliability of evidence received. The former is a ***** to catch and basically my job.
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