It’s not exactly a new concept but, around this time of year, you typically see the idea floating around: It’s usually called something like a “secret sister” gift exchange.
The campaign quickly became popular in 2015 through Facebook posts promising participants would receive up to 36 gifts in exchange for sending one gift, valued at $10, according to the Better Business Bureau.
“Users were encouraged to invite others to participate in the holiday gift exchange, then promised they would receive information on where to mail the gifts,” a BBB statement reads.
But these gift exchanges are really pyramid schemes – and they’re considered illegal, BBB experts said.
How in the heck could this be considered a pyramid scheme?
Under the guidelines of the so-called gift exchange, you have to provide your name and address, along with the personal information of a few friends, and tack this information onto a list that’s already been started online by people you’ve never met.
“Next, it’s your turn to send an email or social media invitation to send a modest gift to a stranger, along with their friends, family and contacts,” the news release explains.
The cycle continues. In theory, you’d buy and ship out these gifts in hopes that you’ll receive the promised number of gifts in return.
But it doesn’t happen.
“Just like any other pyramid scheme, it relies on the recruitment of individuals to keep the scam afloat,” the BBB said. “Once people stop participating in the gift exchange, the gift supply stops as well, and leaves hundreds of disappointed people without their promised gifts.”
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 reviewed, 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.