Points For Avoiding Gifting Scams

Nobody likes being scammed. Avoiding gifting scams is easy with a few pointers from the Federal Trade Commission (FTC). You can see the Commission's take on Gifting Clubs here and Pyramid Schemes here.

A few of those points are mentioned and expanded upon below.

If confronted by an organized gifting club recruiter, remember these points, and you'll avoid being scammed. Even more importantly, you'll avoid being involved in an illegal activity.

If one of these organized programs goes under, you'll be glad you passed on the "opportunity." Avoiding gifting scams is altogether the wisest choice.

3 Points To Remember

Investments, on the other hand, are made with intent of receiving returns. Furthermore, investors expect the returns to outweigh the investments. Legitimate gifts to do not fit into this category.

Supporters of illegal gift scams will often claim that people do give gifts in anticipation of getting gifts in return. What's more, these exchanges may very well be made in an organized fashion, Christmas for example.

This is misrepresenting reality. In an organized holiday gift exchange, there are typically no extrinsic profits, or losses for that matter. Every person agrees to give a gift valued at X dollars, everybody gives a gift valued at X dollars, and everybody receives a gift valued at X dollars.

Every individual receives in value what they gave in value. Granted, occasionally in these situations, one person will receive a gift higher in value than what he or she gave.

The important thing to remember is, though, that one person will have then had to have necessarily received LESS than what he or she gave.


2) Beware of shady legal areas. Scammers running gift clubs will almost always fall back upon one disclaimer: All members who make payments recognize that the payments are gifts and expect nothing in return.

If nothing else, this disclaimer often clashes with the programs sales pitch and creates a confusing message. The sales page will say there's a great way for you to make thousands of dollars simply by making a payment. Then the disclaimer says that you're making payments without expecting to make a profit.

This is just a game of legal tiddliwinks that the operators of the scams are playing in an attempt to avoid being shut down and prosecuted.

Gifting is legal, but gifting pyramids are not. As a result, con artists are required to break the appearance of the structure (pyramid) by saying no one is planning on profiting.

This is a very shady justification that isn't likely to hold up once legal authorities begin investigating a particular gifting network.

It's a loophole that will, in all likelihood, begin tightening around the scam operators' necks once authorities become aware of the activity.


3) Don't put too much stock on other's success. Gifting scams make the creators rich - that's the purpose of creating them. Unfortunately, they don't make a lot of other people money. Lots of people wind up being losers in gifting scams.

So remember, just because a few people got in early enough to make money, don't think you'll be that lucky as well.

The number of people capable of losing money in a ponzi scheme is 89% or higher. Don't try to beat those odds.


Avoiding gifting scams is the all around safest choice. Losing money is bad enough, but involvement in a federal crime (no matter how minor the part) is definitely not desirable.

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