How to Avoid Becoming a Victim of the eBay Gift Card Scam
eBay gift cards make great gifts, but they can also be used in a scam that circumvents the platform’s purchase protection features.
- Do you need a business bank account for your online business? Have a look at our review of the five best bank accounts for sellers, some of which are free with no minimum balance or deposits.
- AI can change your entire social media game today. Learn how you can save time writing engaging content faster. [sponsored]
- How to lower your taxable income and pay less in taxes. [sponsored]
- ‘My Community Made’ is a new marketplace to compete with Etsy and Amazon Handmade.
- EXCLUSIVE: Interview with Chris Prill, VP eBay Motors, discussing the new Guaranteed Fit program.
The company promotes itself as a safe and secure marketplace for sellers and buyers alike offering a money-back guarantee and seller protection when things go wrong.
But the catch to the protections offered is that both parties in the transaction follow the platform’s rules and policies. Unfortunately, scammers find ways to exploit eBay’s brand and trust messaging by tricking lesser experienced buyers to circumvent its rules.
The con may also permanently boot honest sellers off the platform.
Last week, Phoenix TV station KPHO-TV reported that an Arizona man was scammed out of $1,000 on eBay using eBay gift cards trying to buy a used truck.
Using this example, let’s take a look at how this scam works and why sellers need to be careful as well.
The eBay Gift Card Scam
The scammer posted a truck for sale on eBay Motors but stipulated that the vehicle could only be purchased with eBay gift cards.
But instead of completing the transaction online with the gift cards, the scammer tricked the victim into buying eBay gift cards at a local grocery store and provide important information from the cards over the phone.
On the back of eBay gift cards, there is an area that needs to be scratched off to reveal hidden numbers that are needed to use the cards in a transaction.
What the buyer didn’t realize was that once the seller had those secret numbers, the scammer could immediately use the gift cards to make purchases on eBay or try to turn them into cash through a gift card exchange.
In all, the buyer was asked to purchase five $200 eBay gift cards to pay the $1,000 agreed price for the used truck. Splitting the transaction into multiple gift cards makes it easier for scammers to use up the value of the cards quickly before eBay may have a chance to freeze the cards.
Since the original truck purchase was never completed on the platform, the buyer lost the $1,000 they paid for the eBay gift cards and there is no eBay buyer protection for him.
The deception worked because the scammer exploited the brand awareness and trust of eBay but manipulated the victim to follow directions that circumvented the standard buying process that would normally provide buyers with purchase protections offered by eBay.
Therefore, using a trusted brand like eBay as cover, con artists have an easier time convincing people to follow directions with a payment method that offers no purchase protection such as credit cards or even many debit cards offer.
Gift cards make great gifts, but they should never be used as a condition to “finalize” a purchase. That is a big red flag!
Last year the FTC reported over 40,000 people were swindled out of over $148 million in the first nine months of 2021. This number is likely an undercount as many of these scams are never reported to law enforcement as many victims are embarrassed to report these crimes.
It is unknown how widespread this scam may be on eBay using eBay gift cards, but buyers should always look out for some unusual steps that sellers may ask them to do.
Any requirement to only use gift cards to complete the transaction and provide information from the gift cards offline should raise immediate suspicion, even if this comes from what appears to be a long-standing eBay selling account. The selling account may have been compromised and stolen as well.
When buyers feel something is off they should review this eBay page on how to avoid being scammed, and if applicable report the transaction immediately to eBay and stop all communications with the seller.
But this scam can also make victims out of eBay sellers whose account was compromised and used.
eBay Sellers Can Become Victims Too
Although it wasn’t mentioned in the original news story, the eBay seller account used in this gift card scam was probably stolen to make identifying the scammer virtually impossible.
Sellers who have stopped selling or who only sell occasionally may not pay that much attention to their eBay account or eBay emails and could become indirect victims as well.
With almost certainty, the selling account used in this scam was suspended once eBay was made aware of this con and it may be a permanent suspension.
eBay seems to offer little recourse to sellers whose accounts are suspended and even if they accept an appeal, it may take a long time before a decision is reversed. The company also doesn’t offer many details on account suspension notices, leaving sellers in the dark about why it happened.
In addition, it’s very possible that some “out of the blue” suspension notices sellers have reported receiving may be because the account was compromised and used in a scam.
That is why all sellers, active, dormant, or occasional, should follow eBay’s recommendations to protect their account which includes enabling 2 Step Verification and watching out for spoof or phishing emails.
Not only does this make it more difficult for scammers to victimize buyers, but it also prevents an honest seller from having their account suspended, and potentially losing access to the marketplace platform for good.
Connect with us: Head over to our Facebook Group for Small Business Sellers and interact with other small business owners.
Follow us on Facebook, Twitter, or LinkedIn to stay up to date with relevant news and business insights for your online business.
Subscribe to Our Newsletter
Business Insights for Your Online Business Presented with a Dash of Humor
We do not share your information and you can unsubscribe anytime.
Richard is co-founder of eSeller365. He has over 17 years of experience on eBay which includes tens of thousands of sales to buyers in over 100 countries and even has experience with eBay’s VeRO program enforcing intellectual property rights for a former employer. And for about two years Richard sold products on Amazon using Amazon FBA in the US.
To “relax” from the daily business grind, for a few weekends a year, he also works for IMSA as a professional race official.
I posted a pair of jeans on ebay and they sold almost immediately but then the buyer wanted to see if I would buy a $300 gift card and include it in the box. He said that he was in the military. He would send me the money plus $15 for my time. It’s my first time selling on ebay and it sounds suspicious. I can’t find any ebay support number to call regarding this and I’m not sure what to do now. Does this sound strange or am I just being paranoid?
This sounds like a scam. I would strongly advise not to go through with this request. The buyer may send you money via PayPal or some other cash app, but it could be a stolen card, or he could just file a chargeback.
I am in the process of purchasing a RV for $800 on eBay they asked me to send for $200 eBay cards and they would deliver the RV to me from Virginia I live in Live Oak Florida
How did this work for you? Really wondering cause my wife is looking at a vehicle.
I received a $25 Ebay Gift Card for my birthday. I misplaced it in my desk and when I went to move, 2 years later, I found it. The Redemption Code had never been scratched off. I went to make a purchase on ebay and it said the balance was $0. It says on the card “This gift card never expires, and there are no fees.” When I contacted ebay about this they sent me a link to reactivate the card. They want a picture of the card, AND the original receipt where it was purchased. I never received a receipt and the company I got the card from is no longer in business.
Anyone want to buy a plastic card for $25, If not I am stuck with it and no way to cash it out.
This is ebay’s own scam, if you don’t use it you lose it. Wonder what would happen if someone gave you a gift card and you refused it because you didn’t get a receipt where it was purchased?
Mike Dale is 100% correct, Ebay is also running their own gift card scam! Even if you are able to avoid getting scammed buy 3rd-party scammer when buying an Ebay gift card, your next step is to avoid getting scammed by Ebay, which is very difficult to avoid. Thus, the answer to the question of the article’s title: How to Avoid Becoming a Victim of the eBay Gift Card Scam, is to NEVER EVER buy Ebay gift cards under any circumstance!
Let me shed some light on Ebay’s own scam. Ebay has been freezing several people’s gift cards under the guise of “security concern” or “suspicion of fraud” even when many of these instances are unfounded. A quick Google search will reveal that this problem is rampant (https://www.google.com/search?q=ebay+freezing+gift+cards). This is exactly what Mike Dale has experienced. With the rise of 3rd-party scammers, Ebay has decided to get into the game themselves by taking the method of “freeze gift card first, ask questions later”. This results in many false positives. Ebay then makes the process to get it unfrozen long and difficult, requiring documentation in very specific formats, similar to what Mike has experienced.
Ebay has also boldly implied that they are above the law and will scam you of your money by stating this in their Gift Cards Terms and Conditions (https://pages.ebay.com/giftcard/terms_conditions.html):
“We reserve the right to correct the Gift Card balance if we believe that a clerical, billing or accounting error has occurred. You also agree that we may deactivate, cancel or suspend any Gift Card and freeze any associated Gift Card funds if we suspect fraud, unlawful activity or improper Gift Card use. You agree that you will not use a revoked Gift Card.”
The key words here are “believe” and “suspect.” Ebay does not have to provide any proof of error or fraud to simply zero-out or suspend/freeze your gift card. The burden of proof for you the gift card holder is very high though, and you’re still at Ebay’s own discretion if they accept the proof of legitimacy. Adding the now commonplace arbitration clause, preventing you to have any legal recourse, and Ebay has the perfect gift card scam setup! It’s truly genius!