A common scam is that the victim is contacted by someone claiming to be from the tax office or whatever, and that the victim is required to pay a fine.

The victim then buys gift cards and gives the codes to the scammer.

My question is - how does this actually end up earning the scammer money?

I can understand how it would work if the gift card can be used to buy physical items, as the scammer can then conduct a second layer of the scam where they sell the physical items on Ebay or similar.

But for something like where the gift card is something like an ITunes voucher, surely Apple would just reverse the charge and invalidate the the gift card? Or does the scam rely on this not being possible?

Of course, the scammer could be selling ITunes vouchers online directly, but if those were getting cancelled - then surely they would never find a buyer.

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    Or does the scam rely on this not being possible? The scam rely on this not being possible... – ThoriumBR Feb 26 '20 at 1:09
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    This might be a better fit for the finance site on Stackexchange, other than the fact that it has likely been answered there many times already. – Conor Mancone Feb 26 '20 at 2:03
  • Lots of guidance online for how this scam works: consumer.ftc.gov/articles/paying-scammers-gift-cards and outline.com/kssFda – schroeder Feb 26 '20 at 13:50
  • If you knew enough to cancel it, you would know enough to not provide it either. That slack time is enough to do a lot with the gift card. – schroeder Feb 26 '20 at 14:02

The important thing to remember is that, in essence, scammers are operating on their home turf. They get to dictate the payment method, and as a result a (good) scammer will make sure and use a "payment method" that meets the following two criteria:

  1. The transaction cannot be reversed
  2. The payment can easily be converted to cash or used directly

Note that the above criteria are why Western Union is so common in scams: once you send the money you can't ask Western Union for a refund a week later, and on the other end the scammer can receive cash directly. Gift certificates have the same advantages:

  1. You generally can't cancel the purchase of a gift certificate
  2. A scammer can use a gift certificate to buy stolen goods for sale, can sell the gift certificate directly, or even just use it to purchase things they needed anyway (h/t MechMK1)

It's possible that some kinds of gift certificates may be cancelable. It is safe to assume that the scammer knows about the exceptions and avoids them. After all this is how they make money, and in a properly executed scam the victim is going to follow orders. Therefore the scammer will choose whatever is most convenient for them.

It's also important to keep in mind that a scammer may be working more than one "angle" at the same time. For instance a scammer who gains access to a bank account doesn't just send the money to themselves. Instead they may transfer the money to another victim who sends the money to the scammer via Western Union/gift certificates. This way when the bank rolls back the bank transfer (because bank transfers are reversible), someone else is left holding the bag. Similarly a gift certificate may be sold/used quickly or exchanged for cash with another victim and as a result the scammer doesn't care if it is cancelled.

Still, if I were a betting man I would just assume that the scammer has requested payment via non-refundable methods.

  • Right. The scammer wouldn’t do it unless there’s a reward. Selling the gift card for cash at a discount comes to mind. – Jonathan Feb 26 '20 at 7:18
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    That said, some gift cards for things like Amazon or PayPal are "as good as" cash. If someone gave me a 200 USD gift card for Amazon, it would have about the same value as 200 USD in cash for me. – MechMK1 Feb 26 '20 at 12:13
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    @MechMK1 That's a true story, although I've always wondered what the selling process looks like. After all, if someone offered to sell me a $200 amazon gift card for $200, I would laugh at them (not literally of course). For that price I'd buy it from amazon with 0 risk. Therefore you'd think there would be some inherent cost of selling them. Do they sell them to someone else? Do they buy goods that they can easily sell online for cash? Pretend to run a pawn shop so that they can wash the money as well? I'm sure the answers vary – Conor Mancone Feb 26 '20 at 13:20
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    Sale would not be on legit marketplaces - it would be easier on black market (dark net(!) gasp!) . Easier liquidity, too. – schroeder Feb 26 '20 at 14:00
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    Yes, there is a marketplace for gift cards. They pay .75-.90 on the dollar. It's on the dark web, by which I mean IPv6. – Harper - Reinstate Monica Feb 26 '20 at 14:19

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