Gift card scams are on the rise. Here's how to spot them.

Scammers use all types of tricks to separate you from your money.

They pretend they are Internal Revenue Service agents, police officers, Microsoft technical support staff, your own grandchild, even people whose job is to notify you that your car's warranty has expired.

No matter the scam, a new study from the Better Business Bureau shows that an increasing number of them rely on victims sending them gift cards as payment.

The study, Gift Card Payment Scams: BBB Reveals Why Scammers Love Gift Cards, revealed that gift card payment scams are on the increase.

Losses reported to the BBB Scam Tracker for these scams nearly tripled between 2017 and 2020, with a median loss of $700 in 2020. It appears consumers over 65 were more likely to lose money than younger ones.

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BBB officials described the case of a woman who reported her scam in the fall of 2020.

The woman transferred $800 in American Express gift cards to purchase a puppy she found online. The shipping company that was supposed to deliver her new dog requested payment for an air-conditioned crate, so the woman sent $1,200 more in gift cards.

Those payments still weren't enough. The scammers told the woman one of the cards had no balance and asked that she send another one. When she refused, they stopped all communication with her.

“If you’re asked to make payment via gift card for whatever reason, you almost certainly are dealing with a scam,” said Warren King, president of the BBB in western Pennsylvania. “Gift cards don’t carry the same protections as credit or debit cards, so funds spent on gift cards are funds you usually cannot get back.”

The BBB said to watch for these red flags:

• Government agencies requesting payment. No government agency requests money through gift cards.
• Statements that buying gift cards is a safe way to make a payment. Providing the numbers for a gift card is like sending cash, and the money is rarely recoverable.
• Keep the receipt when buying a gift card. Keep the physical card, as well. These may help prove that the card was paid for and activated if problems arise later.
• Inspect the card carefully before buying it to be sure it has not been tampered with. Some scammers open the card to get the numbers on the back so that they can take the money when the card is later activated.