Sweepstakes and Prize Scams: 9 Payment Requests That Mean “It's a Scam”

Introduction — If they ask you to pay, it's probably a scam

Sweepstakes, lottery and prize scams keep evolving, but one constant remains: legitimate sweepstakes don’t ask winners to pay money up front to claim a prize. Scammers use urgency, excitement, and official-sounding claims to pressure victims into sending money or codes — often via untraceable methods like gift cards or cryptocurrency. If anyone contacts you saying you won and then asks for payment, slow down and verify — there’s a very strong chance it’s a scam.

This guide lists the nine most common payment requests that should instantly raise your red flag, explains why scammers use each method, and gives clear next steps to verify, stop the fraud, and report it.

Nine payment requests that mean “It's a scam”

1. Buy and read out gift card numbers or PINs. Scammers often tell victims to buy gift cards (iTunes, Google Play, Amazon, Walmart, etc.) and provide the card numbers or PINs. Gift cards convert to cash fast and are nearly impossible to trace or recover. If someone tells you to pay with a gift card to claim a prize, hang up.
2. Send cryptocurrency (Bitcoin, Ethereum, stablecoins). Requests for crypto are increasingly common because transactions can be pseudonymous and irreversible. Scammers will provide a wallet address or ask you to use an exchange or peer-to-peer service to send payment. Do not send crypto to anyone who claims you must pay to receive winnings.
3. Wire money via Western Union, MoneyGram or similar services. Scammers ask for wire transfers because funds can be picked up quickly and are difficult to recover. Legitimate sweepstakes organizations won’t ask winners to wire money to claim a prize.
4. Buy prepaid debit cards / money packs (MoneyPak, reloadable cards). These function like gift cards for scammers and are used the same way: load value, send code. Treat these requests as you would gift card requests.
5. Send money to a person or account via peer-to-peer apps (Zelle, Venmo, Cash App) to an unknown recipient. Scammers ask you to use P2P apps and then request you to “send the fee” or “release a hold.” Only send money to people you know. If an unverified prize handler asks you to use P2P apps, it’s a red flag.
6. Pay a “tax,” “processing,” “customs,” or “broker” fee in advance. Real lotteries and reputable sweepstakes deduct taxes from payouts or report winnings to tax authorities — they don’t demand up-front payments from winners. Be cautious: scammers invent bureaucratic-sounding fees to pressure you into paying. (See tax treatment of winnings for correct procedures.)
7. Deposit a check and send part of the funds back. Scammers sometimes mail or email fake checks, let you deposit, and then ask you to wire back part of the money or buy cards. Banks may initially make funds available but the check can later bounce and you’re left liable for the withdrawn amounts. Never send money back from a check you don’t recognize.
8. Pay a courier, bond, or handling fee to receive the prize at your door. Scammers claim they’ll deliver a prize but need a “courier fee” or “bond.” Delivery services and legitimate prize administrators do not require private advance payment by winners to drop off prizes. Verify with the company directly.
9. Move funds through odd third-party escrow, resellers, or “verification services.” Scammers will sometimes ask you to use an unfamiliar escrow or verification site or to transfer money through a third-party seller. These services are often controlled by the fraudster. Always verify escrow providers independently, and never use a payment channel supplied only by the caller.

One recurring pattern: once a victim pays one fee, scammers invent another — that’s how small losses snowball into large ones. If a request fits any item on this list, treat it as a scam and stop communication.

How to verify, protect yourself, and report the scam

Quick verification checklist

• Did you enter the sweepstakes? If not, be skeptical — unsolicited prize notices are almost always fraudulent.
• Contact the company using phone numbers or email addresses from its official website (not the number or link the caller/text provided).
• Search official consumer warnings for the brand or prize name (BBB, FTC, news outlets).
• Never give out bank account numbers, full Social Security number, or online banking passwords to claim a prize.

If you already paid or shared sensitive info

1. Stop communicating with the scammer immediately.
2. Contact your bank and payment provider (gift card issuer, crypto exchange, P2P app) and report the transaction. Some providers can freeze or flag transfers if acted on quickly.
3. If you deposited a check, contact your bank — do not withdraw or resend those funds. You may be responsible for bounced checks.
4. Report the scam to the FTC at ReportFraud.ftc.gov and file a complaint with BBB Scam Tracker or IC3 (for online/telephone fraud). Your report helps enforcement and may protect others.
5. If you shared personally identifying information, consider identity theft steps at IdentityTheft.gov and place fraud alerts with the credit bureaus.

Why taxes don’t justify advance payments

Legitimate tax withholding or reporting for winnings is handled by the payer — they do not demand that you pay taxes up front to a stranger. U.S. tax rules treat many sweepstakes and lottery winnings as taxable income, and payers report these amounts to the IRS; you may owe taxes, but you will not be asked by a prize caller to send cash or gift cards to cover those taxes. For specifics on tax treatment of winnings, see IRS Publication 17.