> 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.

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?

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.

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.

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

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 to my number. Of course it was a scam that had nothing to do with my CEO. I wonder how they got my number?

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.

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.

> 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.