5 Scams You Shouldn't Fall For This Holiday Season

×

You might think that in these tough economic times, Americans would be spending less on gifts during the holiday season. Think again. According to a recent American Express (AXP) report, Americans expect to spend about $831 on gifts, fully 17% more than last year. With money tight for so many, though, it's more important than ever for us to be wary of scammers and to not lose any of our hard-earned dollars to them.

Here are some of the most common scams you might encounter this holiday season and beyond:

1. Internet Scams

Don't spend your money on any site you're not sure is honest.

Fake websites often end up cheating those who most wanted to save money by finding the best price. You might, for example, use Amazon.com (AMZN) or another reputable online retailer to zero in on a product you want to buy. But before buying, you do a quick search for better prices elsewhere, and find a site offering a great deal. Even if it looks legit, it might not be. (You'll also run across fake sellers via online ads and in some emails.)

To investigate a site, you might enter its full name (including the ".com") into a search engine, along with the word "scam" or "fraud," and see what comes up. Check it out at the Better Business Bureau, too. At comparison-shopping sites such as Shopping.com, Pricegrabber.com, or Nextag.com, retailers are rated and reviewed. If you're still not sure about a site, consider sticking with a retailer you know and trust.

2. Fake Deliveries

At this time of year, it's not unusual to get a notice about a package that someone attempted to deliver to you. Unfortunately, some of these can be scams, telling you to call a certain phone number to coordinate a delivery time. The number you call might result in your phone being charged steep sums while you wait on hold, listening to music. Alternatively, you might simply be asked to provide some personal information over the phone -- which could be used to steal your identity or some of your money.

Again, look up the phone number you're given. Just doing a Google search on it might turn up some horror stories -- or might show that it's really a contact number for FedEx (FDX) or UPS (UPS).

3. Charity Cons

These are some of the cruelest scams. You think you're donating to the needy, but you're actually being bamboozled into giving those dollars to a charlatan. Scammers know that we can be especially soft touches around the holidays, so they're out in force. They may find you at a shopping area, they may call you, or they may ring your doorbell. They may have children with them, too. Remember that though they may seem legitimate, they may be fooling you.

Don't fall for sad stories or pleas for cash unless you're sure you're dealing with a reputable organization. Get the organization's name and look it up online. Check out Charity Navigator, GuideStar, or GiveWell. Even the BBB offers reviews of charities. Once you're comfortable with an organization, consider donating to it directly, instead of via someone claiming to represent it.

4. Old-Fashioned Real-Life Trouble

Many old tricks never go out of style, such as simple pickpocketing or purse-snatching. Be careful in crowds, and note that someone jostling or bumping into you might be distracting you while your wallet is lifted. If someone in the parking lot approaches you carrying a gas can and asks for a few dollars because he ran out of gas, think twice. That's a common scam, too.

When paying at the cash register, be sure you're not short-changed, either by accident or intentionally. When buying tickets for events, favor reputable vendors. If you encounter a "liquidation sale," don't assume that you're really getting rock-bottom prices. The seller may just want you to think that.

5. Gift-Card Waste

Some ways we lose money in the holiday season are far from illegal. Consider gift cards. They certainly make for easy presents for our loved ones, and they've skyrocketed in popularity in recent years, but about a quarter of us have at least one gift card from last year that we never used.

In his book Scammed: How to Save Your Money and Find Better Service in a World of Schemes, Swindles, and Shady Deals, Christopher Elliott notes, "Americans give $90 billion worth of gift cards every year, most of it during the holidays. But up to 7% of the cards go unredeemed." That represents billions of our dollars that end up in corporate coffers, not in our loved ones' hands. One estimate finds about $30 billion in gift cards lying around in our homes, with the average American household leaving about $300 on the table.

When giving gift cards, try to be sure you're giving ones appropriate for the recipient. And if you get some you're not likely to use soon, consider selling them via online gift-card markets such as CardCash.com, PlasticJungle.com, Cardpool.com, CardWoo.com and GiftCards.com.

Don't let your generous spirit get taken advantage of this holiday season. Shop and donate with your eyes open.

Longtime Motley Fool contributor Selena Maranjian owns shares of Amazon.com, but she holds no other position in any company mentioned. Click here to see her holdings and a short bio. The Motley Fool owns shares of FedEx and United Parcel Service. Motley Fool newsletter services have recommended buying shares of FedEx and Amazon.com.


Increase your money and finance knowledge from home

What is Inflation?

Why do prices go up?

View Course »

Economics 101

Intro to economics. But fun.

View Course »

Add a Comment

*0 / 3000 Character Maximum

151 Comments

Filter by:
Baby

Hi Happy New year every one.
I'am a sweet, friendly, honest (sometimes too honest), caring girl in search of "the one".I've been single for over two years . so i got a profile(Autumngirl55?5) on ----Tallhub.C'0M----?-It is the largest club for tall men or pretty girls mate. maybe you wanna hit me up ,seriously !
67689709-0=0-=

January 03 2012 at 10:15 PM Report abuse +3 rate up rate down Reply
Ngfrjnhygt

I am a young and beautiful woman from US. i just think here is a good place to meet friends. i just wonder if i can meet a rich daddy here, because i am at the beginning of my career and i need someone's support..iuploaded my hot photos on ----[SugarDadMeet.C óM ]----under the name babylove2011 , maybe you want to check out my photos firstly!"Charity begins at home" is the moto I live by. I have children in need and certainly no one is going to give them a financial handout. Each week I receive at least 25 to 50 requests for money. I am amazed at the expense they go to for the purpose of begging for money. Some of the envelopes actually have either a nickle or a $1 bill enclosed! Also, the phone calls got so frequent that I have to depend on my caller i.d. to screen them before I answer because I hate answering and then getting angry with someone asking for money.

December 05 2011 at 11:22 AM Report abuse rate up rate down Reply
ADI AND JANET

How about the scam that AOL has on this page. "Boost Your SS check by 23%" I wouldn't trust giving that scam my email address!!

December 05 2011 at 11:20 AM Report abuse rate up rate down Reply
Rain

http://givewell.org/

Finds the charities that *don't* use +50% towards administrative costs. We use this regularly in Phi Theta Kappa when we organize a charity drive.

December 02 2011 at 3:06 PM Report abuse rate up rate down Reply
Shirley

It's interesting that the people who oppose government welfare programs think giving to private charities is the right thing to do. Several years ago the John Birch Society [fanatic conservatives] complained that 10% of the government's welfare budget went to administration of the program. However they failed to mention that private charities that they were in favor of use 50% and more to administer their programs. I think charieties should be illegal and we should instead support government welfare programs which are more accountable. Let the criminals get a job.

November 30 2011 at 5:17 PM Report abuse rate up rate down Reply
bullockmed

I register with what is usually the Secretary of State's Office each year. Filing legal paperwork and tax returns for the charity I founded. Most states keep public records available to the public over the internet for verification of the charity and what percentages of donations actually are used for the intended purpose. So if someone is being ripped off, it is there on fault. And, to answer situation that charities are requesting to many donations, the problem exists wherein large charities are spending 65 to 85% of gross donations to pay salaries and operating cost. These are the folks who are cheating and lying to you about your donations. This is not the norm for local charity which gives back to the community in which the charity is located. So, you can stick this article up your blow hole. You really don't have an idea. Get out of your office and start a charity that really helps make a difference in your community and see, just see *******, how hard the donations are come by.

November 30 2011 at 5:16 PM Report abuse rate up rate down Reply
bullockmed

This article is bull ****. I have a charity dedicated to providing health check ups, care, and etc... It will also supply scientific grants for research needed but not important enough for funding by NIH-miniority diseases. As for cons,
in the state, or any state I wanted to operate in, requires I registered with what is usually the Secretary of State's Office. I tremendous amount of financial reporting is completed each years as well as tax returns. In North Carolina,
Mrs. Elaine Marshall's Office (Secretary of State) maintains a file on each charity accessible to the public. So, if someone out there is being rippred off, it's because they are not checking out the charity in question. Also, while I support the Salvation Army it is not the only charity in the United States which does a great job at helping folks. Therefore, this article in nothing short of Bull **** created by a writer who does not know what in the Hell goes on in the Real World. The cons are small compaired to the charities which make a difference. Stick this article up your blow hole. Thank you!!!!!!!!!!!!!!!!!!!!!!!

November 30 2011 at 5:06 PM Report abuse rate up rate down Reply
jmbkanga2

Solicitations for charitable contributions are soooo out of hand. Safeway now asks for a donation from every customer who goes through the checkout line, every single time they shop at that store. CVS Pharmacies are soliciting over the holidays. Whole Foods solicits all year round now, just like Safeway. The Salvation Army has a good reputation, but there was a scandal a couple years when it was revealed that some of their executives lived in very expensive homes paid for by the Army. My church spent most of each Sunday sermon talking about their $50,000 budget deficit and pressuring congregants to increase their tithing. It got to be too much to deal with my own budget deficit, the city's budget deficit, the county budget defiit, the state's budget deficit and the country's budget deficit, and then the church's budget deficit. Now that I'm retired and living on Social Security, it seems there's no where to hide from all the solicitations which I can no longer afford. Mostly I just wish they'd leave us alone. When a major super market like Safeway solicits all year round, we have no way of knowing what happens to that money. When they send checks to "their" charities, do they bother to mention the donations are from Safeway customers and not Safeway Stores? How are these charitable donations handled at tax time? Because the donations flow through Safeway's checking account, do they claim them as their own tax deductible charitable donations? Who's to know?

November 30 2011 at 4:24 PM Report abuse rate up rate down Reply
rjbhighc

Indeed , many Charitys a 'Pick-Pocket"' Out-fits. One shouls ask any one of them what % is going to Charity and how much they keep for them self ? How many Millions does the CEO get , and how big is the Bonus each year , for running av 'Pick-Pocket.' ? Business ? Remember not so long a go the Head Guru of the American Red Cross pocket a huge Paycheck. I think this Lady had to quit her job , as I remember .

November 30 2011 at 4:13 PM Report abuse rate up rate down Reply
Patricia Milam

"Charity begins at home" is the moto I live by. I have children in need and certainly no one is going to give them a financial handout. Each week I receive at least 25 to 50 requests for money. I am amazed at the expense they go to for the purpose of begging for money. Some of the envelopes actually have either a nickle or a $1 bill enclosed! Also, the phone calls got so frequent that I have to depend on my caller i.d. to screen them before I answer because I hate answering and then getting angry with someone asking for money.

November 30 2011 at 3:56 PM Report abuse +1 rate up rate down Reply