Author Topic: Automatically Sell Amazon Giftcards $50/day profit or $20k/yr semi passive gig  (Read 5643 times)

solon

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I applied for the Prime Rewards Visa, but didn't get approved! Don't know why, I have excellent credit, and I already have a Visa from Chase.

That is strange. Do you do tradelines?

Yeah, I do tradelines. I have 2 AUs right now on my existing Chase card.

Setake

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Quick update:

They just informed me that they stopped taking referrals for now. I'll update this once they open the program back up. I had no clue they only had limited spots. Sorry everyone!

kpd905

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I can't imagine Chase keeping your credit card open for more than about a week of this.

Frankies Girl

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OP, that's amazing that they are so responsive to a random stranger that uses their gray area money laundering deal as to inform you within a 48 hour period of your promotion here that they're full up. Amazing. Almost... suspiciously so. That you, a perfect stranger to them, and obviously not an employee or someone hired by them that might be using this forum for SEO to get this terrible scheme out there, would rate contact so you could pass the extremely detailed info on here.

The fact that so many folks here called out the BS and likelihood of getting in major trouble by doing this sort of thing was likely unexpected by them, but most shocking of all, that all of a sudden the company is no longer accepting referrals?

Wow. Color me shocked.






ETA: would just hate for the evidence of the company's name being deleted from this thread, so quoting OP's post where he gave the big reveal:

What's the name of the company? There is no rule against naming the company on the forum.

If that's the case,the company is called zinc.io. You can go see the website. They have a few ecommerce products. They do not list this as one of their products because this is sort of a back end thing for them.

For everyone still reading, I have added a section in the risk portion of my write up. Please go read this as this could be another sticking point with you.

Also, I have posted the company's FAQ in my second post on this thread. Let me know if any other questions!
« Last Edit: June 02, 2018, 08:23:18 AM by Frankies Girl »

Setake

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Wow. Just wow. Honestly, thank you for ruining my Saturday morning.

People were asking for the company name, so I gave it. Damned if you do, damned if you don’t I guess.

They don’t need this for SEO, they’ve got plenty of business coming from elsewhere. This is such a minor part of their business that they really do only need a limited number of people doing this.

I’m seriously just floored by the response here. Some of it is seriously helpful to get me to start asking tough questions, but others like this, just really sours me.

I guess I should have just known better, but the TL thread really made me think you guys would be up for it. Oh well, C’est la vie.


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expatartist

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With "PriceYak" as one of their projects https://www.priceyak.com/welcome/ and given the MIT connection, I'd be surprised if they weren't tapping into:

* The huge Mainland Chinese market for overseas products from the world's biggest shoppers, a way to get around the 30% tariffs slapped on many foreign items if bought in China [many of which are made in China]
* Ways for smaller Chinese companies to get their items to the US more easily without having to register a US business, allowing all sorts of currency stashing

expatartist

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OP, @arebelspy had published thousands of posts before bringing up Tradelines. He'd built up trust within the community for years, is a moderator, etc. Your first post was several days ago, and all but two of your posts have to do with these cards.

It takes time, is all.

Setake

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OP, @arebelspy had published thousands of posts before bringing up Tradelines. He'd built up trust within the community for years, is a moderator, etc. Your first post was several days ago, and all but two of your posts have to do with these cards.

It takes time, is all.

Yeah that’s true, you’re definitely right. Thank you for at least the small bit of consoling words.

I think you guys may have broken me. I did get a good lesson about the internet though!


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Frankies Girl

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Wow. Just wow. Honestly, thank you for ruining my Saturday morning.

People were asking for the company name, so I gave it. Damned if you do, damned if you donít I guess.

They donít need this for SEO, theyíve got plenty of business coming from elsewhere. This is such a minor part of their business that they really do only need a limited number of people doing this.

Iím seriously just floored by the response here. Some of it is seriously helpful to get me to start asking tough questions, but others like this, just really sours me.

I guess I should have just known better, but the TL thread really made me think you guys would be up for it. Oh well, Cíest la vie.


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OP, @arebelspy had published thousands of posts before bringing up Tradelines. He'd built up trust within the community for years, is a moderator, etc. Your first post was several days ago, and all but two of your posts have to do with these cards.

It takes time, is all.

OP, so sorry if you're feelings are hurt, but really digest what expatartist said. You have no standing here, you came in as a perfect stranger, promoting in detail a scheme that really, really REALLY is a terrible idea for anyone to get involved with. Gray area activities, the least of which likely could get your Paypal account suspended for falsely using the free "friends & family" option to transfer money for a company that is neither a friend or family... you do understand that right? It's lying, it's abusing Paypal's very generous offer to allow folks to transfer money for free and you're robbing them of their commission by lying and falsifying your transfers.

The fact that this company Zinc is okay with this? Also terrible business practices, and I personally would never do business with a company that thinks this shit is okay even if I could make a bit of cash by doing so.

You then talk of abusing the Amazon rewards like this is a good thing and once again, the Zinc people are giving you a walk through on how to do so. Those bonuses are there for regular folks to toddle along and get a bonus for their regular spending. Again, if Amazon/Visa discover you're abusing their points/bonus system? They'll likely shut down the account at the very least. At worst? They'll suspend the whole damned deal for everyone because folks can't stop abusing the shit out of this stuff.

And I won't even get into the trouble you could be seeing from the U.S. Treasury department if they decide to investigate this company for money laundering. Or the tax fraud implications.



If you aren't really a company guy promoting this crap... I apologize. But honestly, how else are we supposed to view this? It's a terrible idea, and your sole interactions are defending it and then once it gets to the point of being indefensible, you're offended that your relationship with said company is questioned? And suddenly they inform you they don't want any more promotion from you? That's too much of a coincidence for me, and that's why I called it out.

SEO black hatters do this stuff all the time. Astroturfing - paid shilling, etc., have been a (terrible) marketing technique for as long as the internet has existed. What you've done here is classic astroturfing - look it up if you're not familiar with the term.

I might be wrong. I'm perfectly willing to think you're just a very naive person that saw this as a great idea and somehow missed all the terrible signs until they were pointed out to you here. But again, looking at it from my side... it is classic company shill stuff.

So sorry if that ruined your day, but I guess I'm just a suspicious person that's seen way too many "great ideas" promoted by strangers on forums such as this one, and this sort of thing pisses me off when good people get suckered in by it, or decent promotional deals get taken away because someone figures out a way to abuse and exploit it. If you are one of the innocents that got taken in, that is terrible, but the company itself needs to be recognized and remembered as a bad one to do any business with, and that's why I made sure to quote your post - not specifically to hurt you, but to ensure that a record stays here of how terrible they are and the sort of business practices they condone.

« Last Edit: June 02, 2018, 09:47:35 AM by Frankies Girl »

Setake

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Wow. Just wow. Honestly, thank you for ruining my Saturday morning.

People were asking for the company name, so I gave it. Damned if you do, damned if you don’t I guess.

They don’t need this for SEO, they’ve got plenty of business coming from elsewhere. This is such a minor part of their business that they really do only need a limited number of people doing this.

I’m seriously just floored by the response here. Some of it is seriously helpful to get me to start asking tough questions, but others like this, just really sours me.

I guess I should have just known better, but the TL thread really made me think you guys would be up for it. Oh well, C’est la vie.


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OP, @arebelspy had published thousands of posts before bringing up Tradelines. He'd built up trust within the community for years, is a moderator, etc. Your first post was several days ago, and all but two of your posts have to do with these cards.

It takes time, is all.

OP, so sorry if you're feelings are hurt, but really digest what expatartist said. You have no standing here, you came in as a perfect stranger, promoting in detail a scheme that really, really REALLY is a terrible idea for anyone to get involved with. Gray area activities, the least of which likely could get your Paypal account suspended for falsely using the free "friends & family" option to transfer money for a company that is neither a friend or family... you do understand that right? It's lying, it's abusing Paypal's very generous offer to allow folks to transfer money for free and you're robbing them of their commission by lying and falsifying your transfers.

The fact that this company Zinc is okay with this? Also terrible business practices, and I personally would never do business with a company that thinks this shit is okay even if I could make a bit of cash by doing so.

You then talk of abusing the Amazon rewards like this is a good thing and once again, the Zinc people are giving you a walk through on how to do so. Those bonuses are there for regular folks to toddle along and get a bonus for their regular spending. Again, if Amazon/Visa discover you're abusing their points/bonus system? They'll likely shut down the account at the very least. At worst? They'll suspend the whole damned deal for everyone because folks can't stop abusing the shit out of this stuff.

And I won't even get into the trouble you could be seeing from the U.S. Treasury department if they decide to investigate this company for money laundering. Or the tax fraud implications.



If you aren't really a company guy promoting this crap... I apologize. But honestly, how else are we supposed to view this? It's a terrible idea, and your sole interactions are defending it and then once it gets to the point of being indefensible, you're offended that your relationship with said company is questioned? And suddenly they inform you they don't want any more promotion from you? That's too much of a coincidence for me, and that's why I called it out.

SEO black hatters do this stuff all the time. Astroturfing - paid shilling, etc., have been a (terrible) marketing technique for as long as the internet has existed. What you've done here is classic astroturfing - look it up if you're not familiar with the term.

I might be wrong. I'm perfectly willing to think you're just a very naive person that saw this as a great idea and somehow missed all the terrible signs until they were pointed out to you here. But again, looking at it from my side... it is classic company shill stuff.

So sorry if that ruined your day, but I guess I'm just a suspicious person that's seen way too many "great ideas" promoted by strangers on forums such as this one, and this sort of thing pisses me off when good people get suckered in by it, or decent promotional deals get taken away because someone figures out a way to abuse and exploit it.


I can 100% see your point of view on this. Thank you for clarifying.

In turn, I hope you can see that I was at least trying to follow the correct way of doing it (which is very clearly not revealing the companies name because it will be construed as schilling)? I recognize now I should only be making recommendations if I’m actually a part of the community. I honestly am not here to optimize some random company’s SEO. I wasn’t even going to name them until people really wanted it to be revealed.

I wonder what you guys would prefer I do. I’m seriously open to suggestions here.

While I still see this as a viable side hustle, I just took a drink from the firehose that I clearly wasn’t ready for.


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tralfamadorian

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* Ways for smaller Chinese companies to get their items to the US more easily without having to register a US business, allowing all sorts of currency stashing

Joy. So we can add felony tax evasion to the list too? Because when the IRS audits the multi-million dollar schedule C of our joe schmoe gift card purchaser, they're definitely not going to notice that the international companies are avoiding registering in the US to evade paying federal income taxes.

I'm not trying to scare you @Setake but you should seriously consider talking to a lawyer about your liability here. These are some heavy duty white collar crimes.

I'm a red panda

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  • If you donít catch it in time, you can tell amazon that it was a fraudulent charge and try to reverse the gift cards
  • You can contact Chase and tell them it was fraudulent and hopefully they would reverse the charge
This is outright fraud. You absolutely authorized the purchase and intentionally gave the money away. Why should Amazon or Chase take the hit? The only fraud here would be from you, not the charge on the card.

Setake

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Whoops, accidentally deleted my post. Here’s what is said:

Alright. This is getting way too scary.

I’m going to stop doing this until I get some real answers from this company. If they aren’t up to snuff, I’ll stop doing it for good.

Sorry for the risky recommendation guys, looks like this post should have been asking for advice instead of giving it.



I’ll also add:

If any of you are still interested for whatever reason, I cannot recommend it. I’ll be doing way my more research on this and it’s likely I won’t be doing it again.


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tralfamadorian

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Straight from the horses' mouth. A review of Piranha (Zinc.io gift card branding) that states that the main reason dropshippers are using gift cards is:

"The main reason though that most do not like that way [funding business transactions via credit card] is because at some point in time, you would have to explain to the local IRS why you have so many charges to your credit card..."

frugalnacho

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So what exactly is illegal about this? OP is purchasing gift cards and reselling them to a US company and making a small profit.  I get that it may be skirting the TOS of PayPal, but why would Amazon care if you spend $10k/day? How could you get in trouble with the IRS? Because gift cards you sold to a US company may end up being used for tax evasion purposes? Isn't that a risk with selling gift cards in general? Or anything really?

Clearly this was not how the system was intended to work, but so what? Cc companies probably didn't intend for me to continually sign up for lucrative sign up bonuses, only Tob meet the minimum spend and never pay interest, then turn around and sell tradelines on the card.  They never intended for that to happen, but there is nothing illegal about it and nothing stopping me from taking advantage. 

I'm skeptical and nervous about charging such a large amount on my card and never getting paid. But if they are using arbitrage and making profit from each transaction, why wouldn't they keep the train rolling?

So what exactly is illegal about this, or is everyone just afraid it's going to invite scrutiny and consequences to your account (whether it's justified or not, sometimes the IRS goes rogue - laws be damned)?

JLee

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So what exactly is illegal about this? OP is purchasing gift cards and reselling them to a US company and making a small profit.  I get that it may be skirting the TOS of PayPal, but why would Amazon care if you spend $10k/day? How could you get in trouble with the IRS? Because gift cards you sold to a US company may end up being used for tax evasion purposes? Isn't that a risk with selling gift cards in general? Or anything really?

Clearly this was not how the system was intended to work, but so what? Cc companies probably didn't intend for me to continually sign up for lucrative sign up bonuses, only Tob meet the minimum spend and never pay interest, then turn around and sell tradelines on the card.  They never intended for that to happen, but there is nothing illegal about it and nothing stopping me from taking advantage. 

I'm skeptical and nervous about charging such a large amount on my card and never getting paid. But if they are using arbitrage and making profit from each transaction, why wouldn't they keep the train rolling?

So what exactly is illegal about this, or is everyone just afraid it's going to invite scrutiny and consequences to your account (whether it's justified or not, sometimes the IRS goes rogue - laws be damned)?

Please tell me you aren't equating "selling gift cards" in general with selling $3.65 million in gift cards every year.

frugalnacho

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So what exactly is illegal about this? OP is purchasing gift cards and reselling them to a US company and making a small profit.  I get that it may be skirting the TOS of PayPal, but why would Amazon care if you spend $10k/day? How could you get in trouble with the IRS? Because gift cards you sold to a US company may end up being used for tax evasion purposes? Isn't that a risk with selling gift cards in general? Or anything really?

Clearly this was not how the system was intended to work, but so what? Cc companies probably didn't intend for me to continually sign up for lucrative sign up bonuses, only Tob meet the minimum spend and never pay interest, then turn around and sell tradelines on the card.  They never intended for that to happen, but there is nothing illegal about it and nothing stopping me from taking advantage. 

I'm skeptical and nervous about charging such a large amount on my card and never getting paid. But if they are using arbitrage and making profit from each transaction, why wouldn't they keep the train rolling?

So what exactly is illegal about this, or is everyone just afraid it's going to invite scrutiny and consequences to your account (whether it's justified or not, sometimes the IRS goes rogue - laws be damned)?

Please tell me you aren't equating "selling gift cards" in general with selling $3.65 million in gift cards every year.

Why? What about scaling it up makes it illegal?

arebelspy

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Posting to follow.

Seems like a pretty terrible idea in general, for many reasons mentioned above.

It's amazing though how many things there are out there like this.
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JLee

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So what exactly is illegal about this? OP is purchasing gift cards and reselling them to a US company and making a small profit.  I get that it may be skirting the TOS of PayPal, but why would Amazon care if you spend $10k/day? How could you get in trouble with the IRS? Because gift cards you sold to a US company may end up being used for tax evasion purposes? Isn't that a risk with selling gift cards in general? Or anything really?

Clearly this was not how the system was intended to work, but so what? Cc companies probably didn't intend for me to continually sign up for lucrative sign up bonuses, only Tob meet the minimum spend and never pay interest, then turn around and sell tradelines on the card.  They never intended for that to happen, but there is nothing illegal about it and nothing stopping me from taking advantage. 

I'm skeptical and nervous about charging such a large amount on my card and never getting paid. But if they are using arbitrage and making profit from each transaction, why wouldn't they keep the train rolling?

So what exactly is illegal about this, or is everyone just afraid it's going to invite scrutiny and consequences to your account (whether it's justified or not, sometimes the IRS goes rogue - laws be damned)?

Please tell me you aren't equating "selling gift cards" in general with selling $3.65 million in gift cards every year.

Why? What about scaling it up makes it illegal?

You claimed that there was a risk that gift cards were being used for tax evasion purposes regardless. My point is that's a ridiculous comparison given the scale we're talking about here.

I don't know if it would be illegal or not. I do know that Paypal is not going to be pleased with you, and $10k a day in friends/family payments is, IMO, exceptionally likely to get noticed. 

Bottom line is it smells bad and doesn't pay nearly enough for the level of risk. I would not be surprised to see Chase, Amazon, and/or Paypal terminate a customer relationship once this behavior is noticed.

Toad

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Won't be doing this one myself, but I am with @frugalnacho on this one.  I am certainly not a lawyer, so really I am just genuinely curious how this is illegal.  In my mind I would be buying giftcards and selling it to a US company.  This company then would take them and do what they want with them.  My participation in whatever is being done ends with the company I sold them to.  Nothing illegal that I see about buying giftcards and selling them to a company.  I'm not even sure using the Paypal friends and family to transfer money violates their terms of service...just looks like it results in no protection for the transfer of money.  This is what I found regarding doing this and it appears to be straight from the horses mouth:

https://www.paypal-community.com/t5/About-Payments-Archive/What-is-difference-between-paying-a-friend-and-a-business/td-p/756579

Taxes are slightly more difficult and might flag you for audit. PayPal will be reporting your earnings, and they will think your earnings are massive. If you do it every day of the year with maximum potential, PayPal will report your earnings at ~$3.50 million (365*$9,550). Your Schedule C will then in turn show massive expenses $~3.45 million (365*$9500).

Yeah, the Schedule C implications are enormous. Have you filed a tax return yet showing this income?

Just filing that SchC with the IRS is going to invite a lot of scrutiny. Not to mention Paypal, Chase, and Amazon. No thanks.

In my opinion the fear of reporting a ~3 million profit and subsequent ~3 million loss on your schedule C tax form is way overblown.  I doubt this level of transaction will even register with the IRS as odd.  I develop and test automated trading routines in my free time sometimes.  For the past 3 years I have had over a million in profit and loss on my schedule C as a result of this testing...and I am only typically doing it 3-6 months out of the year with a very small fraction of my net worth.  If I were doing this full on year round, I would have profits and losses approaching 1 billion on my schedule C.  There are a good number of people that day trade and I would imagine there are many many many other fairly easy ways you will end up with in excess of 1 million income with an expense to offset it on your schedule C.

Really there are only three things in my mind that prevent this from warranting consideration:

  • You are floating 10-30k to a company with a promise they will pay you back.  You have no protection on this money so you are relying on good faith for them to pay you back.  Although this is a fairly major hurdle to get over, the company does seem to be keeping their word and really doesn't have a good reason not to since everyone is profiting from this.
  • One of the main reasons in my opinion this is a bad idea is because the company appears to be doing legally questionable things.  If/when this catches up to them, their assets will be frozen and they will be unable to pay you back for whatever gift card transactions they owe you for.  Good luck getting the money back for whatever they owe you at that point.
  • The other main reason this appears to be a bad idea is this appears to be a startup company.  A lot of startups fail and again, if/when this happens, they will not have the funds to pay you back for whatever gift card transactions they owe you for.

Since all the money transactions are taking place on trust, you have no recourse to get your money back if 2 or 3 happens.
« Last Edit: June 03, 2018, 12:22:15 PM by Toad »

beekayworld

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Leaving Paypal out of the equation eliminates a large portion of the risk.

What is the reason to involve Paypal at all? Why doesn't the company wire the money directly into the card seller's bank account? The seller would then immediately transfer that to the credit card company.

Really thinking outside the box, could the company electronically send your payment to your credit card company? Then you wouldn't even need to involve your bank! And eliminate having to make daily payments to the credit card.

You'd use your card every day to make the purchases. The company would pay your credit card bill directly every day.  No paypal involved. No bank involved. 




maizeman

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Many of the big consumer banks charge a $15 fee to receive a wire transfer, and ~$30 to send a wire transfer.

If you're making a net profit of $50/day, paying out $45/day in wire fees is a big hit.

ACH transfers are much cheaper but take a long time to post, and can be reversed for days after they post,* so you'd potentially have 4-5 days worth of funds as risk of being pulled back by the company ($50,000?).

We really don't have any cheap and secure ways to rapidly transferring lots of money between two people who aren't able to meet in person.

That's probably why the company is misusing the friends and family feature on paypal to transfer the money.

*There used to be an old scam where someone would approach you about buying a car (or other expensive item) from another state, transfer too much money into your account, ask you to refund the difference, and then cancel the original transfer.

arebelspy

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Imagine the feeling in your gut when this shuts down and you've made $3,000 on it over the course of a few months, and are now out your final $10k purchase (net -7k) with no recourse.
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Doubleh

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There are a few people here saying that this sounds shady but they can't see how it would be illegal. If that's your view you may do well to research "structuring" and "smurfing".

To cut a long story short, there are federal reporting requirements on transactions over 10k. To avoid people simply making numerous small transactions to avoid the reporting requirements an offence was created of structuring transactions to avoid breaching a reporting threshold. The rules here are pretty broadly written, and can result in fines, confiscation of funds or jail time. Sure, in this case the reason for the 10k limit is driven by Amazon 's policies, but guess why they set the limit at that level? Your bank or credit card company seeing a series of transactions at or below 10k every day, totaling to note than 10k, may be required to file a suspicious activity report. And don't expect them to tell you this as there is also an offence of tipping off which means they can't tell you if they have suspicions.

Not saying that this company is involved in money laundering, but it sure looks like it could be money laundering. And the important thing for you to know is that you don't have to be involved in money laundering to get into difficulties - even if it is innocent it looks suspicious enough that you could find yourself having cash siezed with the onus on you to go to court and prove why you should get it back.

I am not a lawyer, just pointing out there is a possible exposure here nobody else seems to have picked up. If I were going to do this id want to have a good chat with a competent lawyer about it first to understand how risky it really could be for me. As it is though I'd say on the basis of the "does it sound too good to be true?" principle I'd give this one a very wide berth

I'm a red panda

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Imagine the feeling in your gut when this shuts down and you've made $3,000 on it over the course of a few months, and are now out your final $10k purchase (net -7k) with no recourse.

Didn't you see the advice to claim fraudulent charges?  No risk!

(can't get a large enough roll eyes emoji here.)


Nate79

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There are a few people here saying that this sounds shady but they can't see how it would be illegal. If that's your view you may do well to research "structuring" and "smurfing".

To cut a long story short, there are federal reporting requirements on transactions over 10k. To avoid people simply making numerous small transactions to avoid the reporting requirements an offence was created of structuring transactions to avoid breaching a reporting threshold. The rules here are pretty broadly written, and can result in fines, confiscation of funds or jail time. Sure, in this case the reason for the 10k limit is driven by Amazon 's policies, but guess why they set the limit at that level? Your bank or credit card company seeing a series of transactions at or below 10k every day, totaling to note than 10k, may be required to file a suspicious activity report. And don't expect them to tell you this as there is also an offence of tipping off which means they can't tell you if they have suspicions.

Not saying that this company is involved in money laundering, but it sure looks like it could be money laundering. And the important thing for you to know is that you don't have to be involved in money laundering to get into difficulties - even if it is innocent it looks suspicious enough that you could find yourself having cash siezed with the onus on you to go to court and prove why you should get it back.

I am not a lawyer, just pointing out there is a possible exposure here nobody else seems to have picked up. If I were going to do this id want to have a good chat with a competent lawyer about it first to understand how risky it really could be for me. As it is though I'd say on the basis of the "does it sound too good to be true?" principle I'd give this one a very wide berth
This was my first thought as well. Extremely risky and foolish at best.

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MrSal

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There are a few people here saying that this sounds shady but they can't see how it would be illegal. If that's your view you may do well to research "structuring" and "smurfing".

To cut a long story short, there are federal reporting requirements on transactions over 10k. To avoid people simply making numerous small transactions to avoid the reporting requirements an offence was created of structuring transactions to avoid breaching a reporting threshold. The rules here are pretty broadly written, and can result in fines, confiscation of funds or jail time. Sure, in this case the reason for the 10k limit is driven by Amazon 's policies, but guess why they set the limit at that level? Your bank or credit card company seeing a series of transactions at or below 10k every day, totaling to note than 10k, may be required to file a suspicious activity report. And don't expect them to tell you this as there is also an offence of tipping off which means they can't tell you if they have suspicions.

Not saying that this company is involved in money laundering, but it sure looks like it could be money laundering. And the important thing for you to know is that you don't have to be involved in money laundering to get into difficulties - even if it is innocent it looks suspicious enough that you could find yourself having cash siezed with the onus on you to go to court and prove why you should get it back.

I am not a lawyer, just pointing out there is a possible exposure here nobody else seems to have picked up. If I were going to do this id want to have a good chat with a competent lawyer about it first to understand how risky it really could be for me. As it is though I'd say on the basis of the "does it sound too good to be true?" principle I'd give this one a very wide berth

Structuring only involves 10,000.01 dollars in CASH (deposits or withdrawals for example and again in CASH) ... money orders or other types of transactional instruments (travelers checks and so forth) it's 3000,01 dollars and up ...

So again, I don't see where this falls on that category as there is no cash involved.

bridget

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[Disclaimer that I am nobody's lawyer here].  Part of my practice is a white collar criminal defense attorney.  Most people would be very surprised at how easy it is to accidentally trip over the line into criminal wire fraud (I was).  When it comes to white collar crimes, please don't live your life according to the premise of "well, I haven't heard of a law against it, so it must be legal."  Plenty people have gone to jail or entered into plea bargains based on schemes that they thought were too-good-to-be-true "loopholes."  As long as you are intentionally doing the illegal thing, it doesn't matter whether you realize it's fraudulent or not. 

The federal wire fraud statute is extremely general and just requires that you participate in a "scheme or artifice to defraud" and use interstate wires (including the internet) to facilitate the scheme.  https://www.justice.gov/usam/criminal-resource-manual-941-18-usc-1343-elements-wire-fraud.  Most states have their own version as well.  Just the simple fact that you tell Paypal that you are doing a friends & family transaction is a false statement that you are doing in order to keep Paypal from getting its fee.  That part of the scheme in and of itself is fraud, and if there are other parts of the chain of this scheme that involve false statements to other people, you're knowingly participating in that.  Nobody is going to prosecute you if you mark the occasional Craigslist paypal transaction as friends & family because at that scale it isn't worth it, but $10k a day is extremely noticeable and once you get into the scale of hundreds of thousands of dollars, will perk the ears of somebody eventually.  If a prosecutor is suspicious that the company is laundering money, a good way to dig into that is to start investigating/charging lower-level folks in the scheme with wire fraud to try to get cooperation to go after the bigger targets. 

The fact that behind the scheme is a legitimate, brick-and-mortar, registered US company shouldn't give you any solace whatsoever.  Big companies on the New York Stock Exchange with armies of lawyers and well-paid executives get investigated and charged with white collar crimes every. damn. day.  Sometimes they win their defense and show that they really just did find a great and totally legit loophole, and sometimes they take a plea deal or get jail time.  Startups in San Francisco try to be "disruptors" and think outside of the box; sometimes they push the envelope too far and get prosecuted for their creative money-making schemes. 

Note: I don't say this to pile onto the OP any more than has already been done!  I take him at his word that this was just something that was working well for him and didn't seem suspicious until this thread.  I also don't want to scare him and suggest that this situation is likely.  I just want to impress upon folks that one should not jump into suspicious schemes that seem too good to be true just because you can't immediately identify what might be illegal about it.

Setake

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[Disclaimer that I am nobody's lawyer here].  Part of my practice is a white collar criminal defense attorney.  Most people would be very surprised at how easy it is to accidentally trip over the line into criminal wire fraud (I was).  When it comes to white collar crimes, please don't live your life according to the premise of "well, I haven't heard of a law against it, so it must be legal."  Plenty people have gone to jail or entered into plea bargains based on schemes that they thought were too-good-to-be-true "loopholes."  As long as you are intentionally doing the illegal thing, it doesn't matter whether you realize it's fraudulent or not. 

The federal wire fraud statute is extremely general and just requires that you participate in a "scheme or artifice to defraud" and use interstate wires (including the internet) to facilitate the scheme.  https://www.justice.gov/usam/criminal-resource-manual-941-18-usc-1343-elements-wire-fraud.  Most states have their own version as well.  Just the simple fact that you tell Paypal that you are doing a friends & family transaction is a false statement that you are doing in order to keep Paypal from getting its fee.  That part of the scheme in and of itself is fraud, and if there are other parts of the chain of this scheme that involve false statements to other people, you're knowingly participating in that.  Nobody is going to prosecute you if you mark the occasional Craigslist paypal transaction as friends & family because at that scale it isn't worth it, but $10k a day is extremely noticeable and once you get into the scale of hundreds of thousands of dollars, will perk the ears of somebody eventually.  If a prosecutor is suspicious that the company is laundering money, a good way to dig into that is to start investigating/charging lower-level folks in the scheme with wire fraud to try to get cooperation to go after the bigger targets. 

The fact that behind the scheme is a legitimate, brick-and-mortar, registered US company shouldn't give you any solace whatsoever.  Big companies on the New York Stock Exchange with armies of lawyers and well-paid executives get investigated and charged with white collar crimes every. damn. day.  Sometimes they win their defense and show that they really just did find a great and totally legit loophole, and sometimes they take a plea deal or get jail time.  Startups in San Francisco try to be "disruptors" and think outside of the box; sometimes they push the envelope too far and get prosecuted for their creative money-making schemes. 

Note: I don't say this to pile onto the OP any more than has already been done!  I take him at his word that this was just something that was working well for him and didn't seem suspicious until this thread.  I also don't want to scare him and suggest that this situation is likely.  I just want to impress upon folks that one should not jump into suspicious schemes that seem too good to be true just because you can't immediately identify what might be illegal about it.

Thanks for the thoughtful response. As mentioned earlier, I have stopped doing this until I get more answers.

There has been a lot of discussion about the friends and family categorization of the Paypal portion. I got a response to my initial email I sent them, which at the time one of the only real questions was about how they structured their paypal transfers. It turns out that they do NOT structure it this way, and do indeed pay fees for this transfer. They didn't tell me exactly how, but based on that video someone posted about piranha they pass these fees onto the giftcard purchasers.

As to all the other questions, I haven't actually gotten around to writing the email to them. I'll post here when there is an update.



Didn't you see the advice to claim fraudulent charges?  No risk!

(can't get a large enough roll eyes emoji here.

[/quote]

I hear you here, since I never expected it would get this far I didn't actually think this part through. It is definitely shitty to pin this on chase or amazon and have them foot the bill.

This company pays you back within hours, not days. If you don't receive the payment, I guess the only morally correct thing you can do is regenerate the gift card codes before they sell them. They do not get any new information about the codes if you do this. In this scenario, you will still end up with the 10k as gift cards at least, and maybe you can persuade amazon to reverse the purchase and dissolve the codes.

Doubleh

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Structuring only involves 10,000.01 dollars in CASH (deposits or withdrawals for example and again in CASH) ... money orders or other types of transactional instruments (travelers checks and so forth) it's 3000,01 dollars and up ...

So again, I don't see where this falls on that category as there is no cash involved.

Thanks for the additional info MrSal - I wasn't aware of a specific reporting requirement at 3k dollars for money orders etc. Just to clarify what you said though, the limits are for reporting requirements. Structuring as a crime relates to making payments of under the reportable limit to avoid the reporting.

Sounds like Bridget has more experience in this area than me so I'd definitely listen to what they have to say. My point for mentioning this was to raise the possibility of something being illegal even if you can't think of why that would be the case, as Bridget says far more elegantly than me.

For what it's worth I'm not based in the USA so not 100% familiar with US laws, but have worked for a couple of international financial institutions which are subject to US laws on things like money laundering. I don't work in a customer facing role so don't have direct experience of this, but am required to have annual awareness training on money laundering. What I can tell you is that banks take anything that looks like money laundering very seriously, and may file a SAR on a precautionary basis - remember the purpose is not for them to determine whether money laundering is taking place but to report their suspicion. And the way the law around money laundering works you could get yourself into a world of hassle, or worse, even without actually having broken a law.

The intent of my post was to point out that this pattern of transactions sounds a lot like the sort of thing that we are told in our training to look out for, so could well be viewed as suspicious activity. As such i would be unwilling to take part in this scheme even if it was 100% legit, and I think it is something others on the board should bear in mind. If you want to see an idea of the kinds of things that may be considered suspicious activity take a look at the link below:

https://www.ffiec.gov/bsa_aml_infobase/documents/red_flags/wire_trans.pdf

To be honest what this most makes me think of is the problem we have here in the UK of people being tricked to act as "money mules" by making payments out of their bank account for which they are re-imbursed. This is often dressed up as a job, maybe as a "payment specialist" or some such thing, while the real purpose is simply to disguise the source of the funds. I can certainly imagine a similar scheme could be put together using Amazon gift cards, and which would look superficially very similar to Setake's description in the OP.

Again I'm not saying that I think this is laundering, just that it looks similar enough that I would be unwilling to get involved. I am also willing to take Setake at face value, and I would agree that their decision to stop involvement in this scheme seems wise.