The truth about those $1,000 gift cards


If you clicked on this story for your “free” gift card, you’ll definitely want to keep reading. I’ve issued plenty of warnings about “free” products, and some of you, dear readers, think I’ve gone too far.

After all, aren’t some of the best things in life free?

Perhaps.

But you might also want to consider a tale of two companies — one in South Carolina, the other in California — which allegedly hired affiliate marketers to send millions of spam text messages to consumers around the country.

The messages included text such as, “Dear Walmart shopper, your purchase last month won a $1,000 Walmart Gift Card, go to [website address] within 24 hours to claim.”

Last month, the Federal Trade Commission (FTC) cracked down on the operations, with the defendants agreeing to pay $2.5 million in settlements.

This alleged scheme offers a sobering warning, not only about come-ons involving the word “free,” but also about what might be gained from offering something that, on its face, actually appears to be completely free.

When consumers clicked on the links in the spam text messages, they were taken to landing pages operated by one group of defendants, asking them to “register” for the free prizes they had been offered.

The registration process, the complaint alleges, was actually a method by which the defendants collected information about the consumers that was then sold to third parties.

But, as you’ve probably guessed by now, no one received a $1,000 gift certificate.

After victims provided their personal information, they were taken to sites owned by another group of defendants. Consumers were told that to win the prize they had been offered, they were required to complete a number of “offers,” many of which involved either paid subscriptions to services, or applying for credit. The FTC complaint alleges that the defendants were paid by the companies that advertised these offers.

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Pretty tricky, huh?


The case underscores an argument I’ve been making for some time as a consumer advocate. Your personal information — your name, address and phone number — is extremely valuable to a business. Companies will pay for that information. Add data about your buying behavior, and your personal information can be worth hundreds of dollars to a company.

Now, I’m not saying this is always a terrible trade-off, but many consumers feel as if their personal information has no value, and then they wonder why their inbox is filled with spam or why they’re getting all kinds of unsolicited phone calls at dinnertime. Well, maybe it’s because that “free” service monetized your personal data. Welcome to the 21st century.

This question comes up most often in the context of a loyalty program, which promises you a “free” airline ticket or hotel stay after spending a certain amount of money. Some argue that they would have given the company their business anyway, so the ticket truly is “free.”

I disagree.

Even if you don’t spend any extra money on a more expensive airline ticket, you’re still giving the airline valuable information about you and your purchasing patterns, and it can sell that data to a third party, and often does. Remember that the next time you get a credit card offer in the mail. Someone paid for your address and identified you as a hot prospect for that rewards card.

Even if you don’t subscribe to my view of “free,” grant me this: The word “free” can be a warning, as when a company offers you a “free” $1,000 gift card. Also, offers of “free beer” and “free puppies and an espresso” (for unattended children) should be viewed with suspicion. Yes, that’s a joke.

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But it’s no laughing matter, in the end. The FTC didn’t say how many consumers were duped into giving away their personal information to these companies, but one is too many. The takeaway is obvious: Don’t hand out your personal information to strangers and carefully consider any “free” offer. Chances are, someone is going to eventually pay for it — and that someone could be you.

This story has been one of our most popular articles, so we’re running it again today as a public service. Since it appeared, the scam seems to have only gotten worse. So, just to be clear: There are no “free” $1,000 gift cards.

Do you believe a company when it offers something for "free"?

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Christopher Elliott

Christopher Elliott is an author, journalist and consumer advocate. You can read more about him on his personal website or check out his adventures on his family adventure travel site. Contact him at chris@elliott.org. Read more of Christopher's articles here.

  • LDVinVA

    So simple – if it sounds to good to be true, IT IS too good to be true!

  • FQTVLR

    I was looking at your site on my mobile device a couple months ago and the WalMart offer popped up. Had a good laugh then.

  • SirWired

    Airlines can sell your purchasing information with or without you joining the frequent flier program, since it’s pretty easy to guess who is who from the information in your reservation record.

  • Bill___A

    I never thought these things were “free” there is always something in it for each “side”.

  • Alan Gore

    This keeps happening to me too when I access this site on my iPhone. The only way I can escape the lock-in is to go out of Safari completely, delete all loaded apps, the go back into Safari, delete all loaded pages within the app, before going back to this site to read more of it before the same thing happens again.

    And don’t get me started on the big purple popup asking to me sign up for the newsletter I’m already signed up for. It covers one-third of my phone screen.

  • KJ

    I want to know how to STOP these malicious pop ups on my iPhone & iPad. I’ll be reading an article on line and all of a sudden here they come. There is no way to close them that I’ve found except to go back to the start of the article…they drive me nuts & I know they’re junk!

  • Fishplate

    I can’t imagine what information they might get from me being a loyalty member that they don’t already know. Many companies need minimal information (which need not be factual), but the airline already knows it all.

    If you have an airline credit card, that’s different. But, that’s different from being a Skymiles member.

  • Fishplate

    Frankly, since online privacy is an illusion anyway, I might as well get a free night, or a free flight, or a free ice cream cone, in return for something that was going to be sold or stolen anyway.

  • LonnieC

    Why do I think that my name, address, and phone number are already in the public domain? Oh yeah, those things called phone books, which were around until a few years ago, and had tens of millions of our names, etc., in them.

  • Tricia K

    I am constantly getting hit by both Walmart and Amazon “freebies” and they are so irritating because they stop me from going to the website I was trying to get to. I have to back out, clear out my history and start over again, and it doesn’t always work. I know that they are fake and that they are trying to gain access to my information, that’s crystal clear. That’s the price we apparently pay for so-called “free” credit reports or in my case, quilt patterns I found on Pinterest. No such thing as a free lunch is as appropriate now as ever before.

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