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 »

Intro to different retirement accounts

What does it mean to have a 401(k)? IRA?

View Course »