It’s not exactly a new concept but, around this time of year, you typically see this idea floating around: It’s usually called something like a “secret sister” gift exchange.
The campaign quickly became popular several years ago through Facebook posts, promising participants would receive up to 36 gifts in exchange for sending one gift, valued at around $10, according to the Better Business Bureau.
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A newer take on the scam revolves around exchanging bottles of wine. Another suggests that people purchase those $10 gifts online.
“Other 2020 versions include this text: ‘If there’s EVER been a year we need random fun presents to come in the mail IT’S 2020!!!!!!’ or ‘Grinches who say this is a scam ... It’s 2020,’” the BBB said.
Bottom line? These gift exchanges are not what they claim to be – and they’re actually considered illegal pyramid schemes, BBB experts said.
How it starts
You’ll likely see a convincing invitation, either by email or social media, to sign up for what seems like a fun concept, the BBB said.
All you have to do is provide your name and address, and personal information for a few friends, and tack this onto a list that’s already started online, of people you’ve never met.
Now it’s your turn to send an email or social media invitation, to send a small gift or bottle of wine to a stranger, along with their friends, family and contacts.
A twist on the idea even asks you to give your e-transfer email, and asks users to pick a name off of a list and send money to strangers, to “pay it forward,” according to the BBB.
So, how is this considered a pyramid scheme?
Just based on how the cycle, detailed above, is set up, you’re left buying and shipping gifts or money to unknown people, hoping that the favor is reciprocated and you’ll receive the promised number of gifts in return.
“Unfortunately, it doesn’t happen,” the BBB said. “Just like any other pyramid scheme, it relies on the recruitment of individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply stops as well, and leaves hundreds of disappointed people without their promised gifts or cash.
But wait. There’s more to consider.
The U.S. Postal Inspection Service said these gift exchanges are considered a form of gambling, and that participants could be subject to penalties such as jail time, fines or a lawsuit for mail fraud, according to the BBB.
Plus, do you really want to be giving out your personal information so easily?
What to do
The next time you see one of these schemes, or anything similar, floating around, here's what you should do:
- Ignore it. Based on everything we just went over, it’s not worth getting caught up in a scam or potential scam.
- Report these social media posts. On Facebook, you can click in the upper right-hand corner and select “report post” or “report photo.”
- Never give your personal information to strangers.
- Be wary of false claims. If you participate in a scam, “You will receive little to no money back on your 'investment' or gift exchange,” the BBB said.
Want to learn more about how to avoid scams? Click or tap here or report any suspected scams through this BBB Tracker.
This story was first published in 2019. It has since been updated.