The gift card accountability sink

Original Article ↗ Hacker News Discussion ↗

AARP Advice vs. Nuanced Reality

  • Strong split: many defend AARP’s “paying by gift card is always a scam” as the right heuristic for non‑experts, especially seniors.
  • Others argue the article isn’t attacking AARP’s PSA so much as using it to explain how gift cards actually function as a payment rail and why the system has so few protections.

“Asked to Pay” vs “Choosing to Pay”

  • Multiple comments stress the difference between:
    • Someone demanding you go buy gift cards and refusing cash/credit → almost always a scam.
    • You choosing to use an already‑owned gift card, or selecting it from several payment options → often legitimate.
  • Consensus rule of thumb: if a stranger or bill‑collector insists on gift cards as the only method, walk away.

Legitimate and Grey‑Area Uses

  • Examples mentioned: consumer VPNs, some adult sites, game currencies, cash‑voucher systems like Paysafecard/Openbucks, unbanked or de‑banked businesses.
  • Several say: by the time you understand the edge cases where gift cards are “fine,” you also understand why blanket “assume scam” advice is still practical.

Economic Value and Everyday Use

  • Many view gift cards as “cash, but worse” due to illiquidity, breakage, and risk; people apply 5–15% discount when valuing them.
  • Others note real advantages: permanent grocery/fuel discounts, privacy (shielding card/bank info), and convenience for large platforms (e.g., loading to Amazon).
  • Corporate uses: tax/HR and anti‑bribery loopholes where small gift cards are treated differently from cash.

Fraud, Abuse, and Security Problems

  • Gift cards exploited for: classic phone scams, “CEO needs cards” smishing, till‑skimming via bogus refunds, tax evasion, child‑support avoidance, and money laundering.
  • Technical attacks: imaging cards in stores, exploiting weak activation/PIN schemes; stores reacting by locking cards in cages.
  • Risk to consumers: no chargebacks, processors freezing value under “fraud” flags, retailer bankruptcies voiding cards, and cases where a bad card locked users out of Apple accounts.

Broader Financial-System Context

  • Discussion connects gift cards to alternative financial services for the unbanked and to “debanking” more generally.
  • Some see gift cards and similar rails as inevitable workarounds in a world of sanctions, risk‑averse banks, and imperfect access to formal financial infrastructure.