Overpayment Scams 101: How Scammers Can Trick You & How to Fight Back

Minute Read

Imagine this: You just sold an item online, and the buyer seems friendly and eager to pay. But then, they “accidentally” send you a check for more than the agreed-upon price. They reach out with a message like this: 

Hi! I'm the person who bought your item! I accidentally overpaid for it by mistake. Please deposit the check and send the extra back in gift cards. Thanks! 

Sounds harmless, right? Not so fast. This is a classic overpayment scam, and falling for it could cost you—big time. 

How the Scam Works 

Overpayment scams prey on your good nature. The scammer sends a check, money order or online payment for more than the actual price. They quickly follow up, asking you to return the extra money—usually through an untraceable method like gift cards, wire transfers or cryptocurrency. 

Here’s the catch: The check they sent is fake. It might look real, but financial institutions take time to verify funds. By the time the check bounces, you have already sent the refund—and the scammer is long gone. Since these transactions are often done through untraceable methods, recovering the money can be extremely difficult. That’s why it is important to recognize the warning signs and avoid falling victim in the first place. 

Where You Might See This Scam 

These scams happen in many ways, but here are some common places where they pop up: 

• Online marketplace sales: Selling something on Facebook Marketplace, Craigslist or eBay? Be cautious if a buyer overpays and requests a refund. 
• Rental property deposits: A “tenant” sends too much for a security deposit and asks for the extra back before the check clears. 
• Freelancing & small business payments: A new client overpays and asks for a refund—before their payment turns out to be fake. 
• Pet adoptions & ticket sales: Scammers also target people selling event tickets or rehoming pets, using the same overpayment trick. 

Red Flags to Watch For 

How can you spot an overpayment scam? Watch out for these warning signs: 

• The buyer sends more money than they should and claims it was a mistake. 
• They insist on quick repayment—often before the original check clears. 
• They ask for refunds in hard-to-trace methods like gift cards, wire transfers or cryptocurrency. 
• The check comes from a different name or account than the buyer. 
• The buyer has an urgent excuse for why they cannot correct the payment themselves.

How to Protect Yourself 

The best way to avoid overpayment scams is to stay cautious. Here’s how: 

• Never refund overpayments. If someone overpays, cancel the transaction and ask for the correct amount. 
• Wait for payments to clear. It can take time to detect fake checks. If you deposit one, wait until it fully clears before touching the money. 
• Stick to secure payment methods. Use trusted payment platforms and avoid wire transfers or gift cards for refunds. 
• Verify the buyer. If a payment seems suspicious, research the buyer and check for red flags before proceeding. 
• Report scams. If you suspect fraud, report it to your financial institution, payment platform or the Federal Trade Commission (FTC). 

Stay One Step Ahead 
Scammers are crafty, but with a little awareness, you can outsmart them. If something feels off—especially when it comes to money—trust your gut. And if a buyer “accidentally” overpays and asks for a refund in gift cards? That’s your cue to walk away. 

At Members 1st, we want to help you protect your hard-earned money. If you ever have concerns about suspicious payments, reach out to us—we’re here to help! Remember: your best defense against these scams is yourself, so use these tips to stay vigilant.  

When in doubt, give us a call at (800) 826-4314 or visit one of our nearly 60 branch locations.