The Money Mustache Community
General Discussion => Share Your Badassity => Topic started by: Setake on May 30, 2018, 10:09:23 PM
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MOD NOTE:
1) The company is no longer accepting new clients.
2) There's a lot of reasons to not do this. Read at least the first two pages of this thread for some of the reasons why. If you're still interested after that, contact the company (listed later in this thread) to see if they're accepting new clients.
/END MOD NOTE
[EDIT: They have 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!
Hey everyone, I am a long time lurker of these forums and I finally thought I could contribute in a meaningful way. So here it is!
I’ve been doing this side hustle now for almost a year. After seeing the tradelines thread it made me realize that you guys might lose this. They just opened up their referral program so I’m here to let you guys in on it! I have already set up a few friends and they are doing this without fault. They are extremely happy about it so far..
What is it?
You sell amazon gift cards automatically to a company who buys them for slightly more than you pay for them. They refund you automatically within hours. It works because you buy them cheaply using your amazon credit card 5% rewards.
This is my daily routine:
- Go to amazon.com
- Buy $10,000 worth of gift cards and send them to a user-specific email created by the company using an amazon credit card with 5% cash back. Bringing your cost basis down to $9500.
- The company refunds you to your PayPal (they know who it is based on what email you sent the gift cards to) within an hour or two at 95.XX%, where XX is a variable rate based on supply and demand.
- Paypal Auto-sweeps this money into a checking account every night.
- Make the credit card payment from the checking account every day.
- When rewards hit after the statement end date, redeem them to pay off credit card fully
- The rate varies based on how many buyers they have for the gift cards and how many gift card purchases they need per day. It varies between 95.25% to 96.2%.
This means you can make anywhere from $25 to $120 a day, simply for buying one item on Amazon and paying off your credit card every day. On average, I would say it’s around $40 a day. It very rarely goes above $50, but there were a couple weeks in April where the returns were at about $120 a day.
Why does it work?
This company has a ton of demand for amazon gift cards. The reason is because they run a separate department that has created a way for their users to drop ship items from amazon using eBay. They automate the process so that when a user buys an item on eBay, they process the order through amazon to ship it to the ebay buyer. (This could also be a great side hustle by the way, maybe for another post!)
[THIS SECTION IS UNDER REVIEW, It could be that they have no international play at all. As tralfamadorian pointed out, if there was an international play this would be considered money laundering which is most definitely illegal. I am doing more research on this as I type!]
So when international users want to get in on this drop shipping side hustle, they can not set up and pay for amazon items using an international credit cards. International users actually end up paying for all their amazon items using Amazon gift cards.
Suffice it to say, they have a ton of demand for gift cards.
The problem though is that Amazon has a limit to $10,000 of amazon gift cards per user per day. This means they need to have people essentially farming amazon gift cards to meet their demand.
They in turn split up the 5% credit card rewards between you, themselves, and the gift card buyer. I don’t know how much they sell the giftcards for, but I assume they make a healthy profit off this. (I wish I had thought of this!)
In the end though, everyone is happy:
- You get a healthy ~$50 profit per day
- They take some percentage of profit
- The gift card buyer gets credit at a discount
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What do you need to get set up?
- Amazon Prime Membership
- Chase Amazon Credit Card with as high of a limit as you can get away with. <$30k is preferable.
- An account with the company. When you set one up they will give you the user specific email.
- A PayPal account. If you want auto-sweep, you can convert a personal account to a business account and this feature gets enabled. There are NO FEES associated with these transfers at any point.
- Ideally a Chase checking account to speed up credit card payments. Not a requirement, but helpful.
There are RISKS though:
When I set this up for my friends, they were extremely skeptical in the beginning. They had a few concerns, and this is how I address them.
- First of all, START SMALL. Obviously you should not immediately send random people $10k out of nowhere. Start with $10, $100 or whatever you are comfortable with. Get used to the process before you do anything you aren't comfortable doing.
- You are trusting this company to refund you the $95XX within a couple of hours. If they for whatever reason don’t refund you, you could potentially be out of luck. That said, there are a few ways to mitigate this risk if for whatever reason they don’t refund you:
- If you catch it in time (probably within a day or 2, before they sell the codes and the user redeems them) you can regenerate the gift card codes and they will have no way of knowing what the new codes are. You will now have 10k in amazon gift card credit that you would have to deal with, but at least you would still have it and maybe get amazon to refund you.
- If you don’t 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
- Your credit score will take a hit. You should NOT do this if you are planning any huge purchases in the immediate future. What happens is that over the month you can accrue massive numbers on this card. Even though you are paying it off daily as quickly as the money comes in, if the statement ends with a high balance on the card, your credit utilization will sky rocket. Some months, my credit score will take an 80 point hit just because it showed I held a $30k CC balance. In reality, I paid all 30k off the next day. The next month, my credit score rebounds to the high it’s always been at. That means that if I ever have a big purchase coming up in a month, I simply stop doing this for a while and my credit score will rebound. Easy peasy.
- 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).
- Chase might catch on and cancel all your cards. This company has said that they have had 2 users (out of hundreds or thousands) have Chase cancel all their accounts with no repeal possible, so do this at your own risk.
- Amazon might catch on and prevent you from buying any more gift cards. When this happens, you just say you are sorry and you can’t buy any more. Sad, but not the end of the world.
- NEW ADDITION: The company is required to collect a W-9 from you, which will have your SSN. This is obviously a big deal if you don't want your SSN being held by someone you don't trust. Do your research and determine if this is something you are willing do do with this company. Here is what they say in their FAQ: We are required to collect a W-9 form (https://www.irs.gov/pub/irs-pdf/fw9.pdf?portlet=103) from every user of []. This is a short form strictly for "information reporting" (source (https://www.irs.com/articles/fill-out-irs-tax-form-w-9)) and mainly contains your address and Social Security number. We need to keep this form on file internally, but we do not send this to the IRS.
- NEW ADDITION: The_Dude brought up the potential risk of civil forfeiture. Read the article he linked to here (https://reason.com/blog/2017/04/04/irs-seized-17-million-from-innocent-busi). This has not happened to anyone that I know of doing this gig. I'll make sure to ask the company if they've ever even considered this as a possibility. A couple businesses this article talks about are all cash business with potential ties to international money (cash-only Mexican restaurants, convenience stores etc). I am still waiting for a response from the company on whether they have ANY international business at all. I'll update when I receive this.
FAQ:
- Are there any fees associated with Paypal?
No, all the transfers happen as if it were between friends and family, so no fees when they send the money to you, and no fees when you transfer to your bank - Why should I preferably have a <$30k credit limit in my card?
All of the transfers take some time. Here is the way it happens:
Day 1: You pay for the gift cards. - $10k credit card debt
Day 1 (+2 hours): Receive PayPal reimbursement for $95XX
Day 1 (Midnight): PayPal auto-sweeps to your checking account
Day 2: Nothing happens. Transfers take 2 business days
Day 3: Money hits your checking account. You can now pay off your credit card.
This means that for 3 days, you are carrying a 10k credit on your card.
If your goal is to do this every day, your limit needs to be 30K to account for this 10k/day float.
Obviously, if you don’t do it every day at the full amount, you don’t need to have such a high limit. - How did you get such a high credit limit on this card?
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When I applied, I initially got a paltry 5k credit limit, even though I have great credit and credit history. I ended up immediately calling them and asking for more. They bumped this up considerably but not all the way.
To get the rest, I shuffled available credit from my other chase cards onto this card. You can do this with no repercussions or credit pulls. Just call up the chase credit card department and ask. The change is immediate. - How do I start?
The most important thing: START SMALL. Obviously you should not immediately send random people $10k out of nowhere. Start with $10, $100 or whatever you are comfortable with. Get used to the process before you do anything you aren't comfortable doing. If you want to start, you can PM me here (https://forum.mrmoneymustache.com/pm/?sa=send;u=25096) and I can give you a referral to the company. Once you set up that account, you can start setting up everything else as mentioned in the above section (What do I need?) - This sounds so risky. Why do you do this to yourself?
Well, to be honest, it’s hard to turn down $50 a day for buying one item on amazon. Once everything is set up, it runs like a well oiled machine. 5 clicks, $50. Who can say no! Also, you realize that this company is raking it in and they will never go out of business. What they are doing is genius and I wish I had thought of it.
I’ll add more as your questions come in!
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I've gotten some requests to share the FAQ that I keep referring to from this company. I have added it below:
What is [product]?
[product] is a tool developed by [company] to help crowdsource the gift card supply we use for our business. Demand is quite high and we need your help buying gift cards from Amazon at discounted rates.
The Amazon Prime Store and Amazon Chase Visa cards let you purchase gift cards at a 5% discount in the form of a statement credit. However, regulations limit the amount of gift cards sold to a single person to $10,000/day.
We will buy gift cards from you at some variable discount, which will always be less than 5%, and you get to keep whatever is left. For example, with today's 4.49% discount, you get to keep 0.51% of your order.
The process works as follows:
- You buy gift cards on Amazon.com and send them directly to us. See the instructions tab for more details.
- Within 1 hour of when we receive the cards, we'll send you payment for 95.51% of the gift card value via PayPal.
- You cash out of PayPal into your bank account, pay off the Amazon Prime Rewards Visa card, and repeat as soon as you have more credit available. You keep 0.51% of the total GC value purchased.
Example:
You buy 20 $500 cards for $10,000
We PayPal you $9,551
You pay off the $10,000 balance on your card
At the end of the billing period, you get a statement credit of $500, keeping $51
Rinse and repeat
Tax Information
We are required to collect a W-9 form from every user of [product]. This is a short form strictly for "information reporting" (source) and mainly contains your address and Social Security number. We need to keep this form on file internally, but we do not send this to the IRS.
Please consult a tax professional for more information about how to properly report your earnings. An approach that we've used has been to file a Schedule C and report your total [product] reimbursements in Box 1 (Gross receipts). Report the sum of your gift card purchases minus your total cash back as Box 4 (Cost of goods sold). Boxes 5 & 7 (Gross profit/income) will then accurately reflect your income from [product]. Although some sources claim that credit card rewards are not taxable, they may be taxable when they are used for business purposes.
If you have over 200 transactions per year through PayPal, you will receive a 1099 from PayPal (source).
FAQWhat do you need gift cards for?
[company] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [product] to add more supply when we have particularly high demand.
I got a reimbursement, but it was for less than the amount of cards I sent.
We get a separate email for each gift card in the order. Sometimes, emails get delayed (either by Amazon or by Gmail). We wait 45 minutes for the cards to stop trickling in, and then group them into one reimbursement. Sometimes, the emails get delayed by more than that (we've seen up to 12 hours).
Please do not click "Resend" on a gift card on Amazon.com, as this will invalidate the old gift cards that we've already loaded into our system.
In rare cases, if it's been over 48 hours since you placed the order, and all of the other codes in that order say "Redeemed", you can click "Resend" on the one or two cards that haven't been sent (that you haven't gotten reimbursed for). This happens because Amazon sometimes fails to send all of the emails for that order to us, and you need to retry.
How do I know I'll be reimbursed?
We understand there's a fair amount of trust involved here, so if you have any concerns feel free to reach out to us! Shoot an email to and we can either get a call scheduled to answer any questions you have or even schedule a visit to the office in San Francisco so you can see what we're all about.[b]What are the downsides?[/b] It's a few minutes of manual effort every few days to order the gift cards, pay off the credit card, and do the accounting. We have had two isolated cases where users' Chase accounts were closed without reason and with no recourse. Although they got all their cash back issued, they are now unable to open Chase credit cards.
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$10 000 at risk for $50?
No thanks.
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$10 000 at risk for $50?
No thanks.
No worries! Everyone has different risk tolerances for sure. I started super small a year ago with quantities of $100 until I was sure about it. I’ve since done this process over 100 times and it’s always been reimbursed within 2-3 hours without fail.
Many of my friends have said the same thing, so I completely understand it!
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What about this is passive? (Other than farming for referral dollars as in this thread, which I do agree is passive.)
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What about this is passive? (Other than farming for referral dollars as in this thread, which I do agree is passive.)
You’re totally right actually... I guess if it’s something you have to do every day it’s not really passive. I’ll change the title to reflect it!
I also want to mention that I did make it truly passive because I wrote a script to purchase the cards automatically at the right time every single day and payoff the card as well. This really has converted it into completely passive, but I just didn’t want to overload the initial post with too much info.
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$50 to launder money for some unknown international entity with the bonus option of being able to lose $10k/day?
(https://media.giphy.com/media/3o7qDDNLf1TCfsCTyU/giphy.gif)
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$50 to launder money for some unknown international entity with the bonus option of being able to lose $10k/day?
Tho company is not actually international. The only reason I mentioned that is because many people question why they have so much demand for gift cards.
The company is founded in San Francisco by MIT grads.
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Ptf
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You send the gift cards directly to the company.
The only reason I didn’t mention the company’s name is because I was following the model arebelspy used for his post. I assumed there were some forum rules about naming companies based off that.
This is probably largely why they seem so mysterious. I’m happy to name them here if there’s no rules against it! It might help to dispel some of that mystery.
The same company is one of the only ones who offer an API for ordering things on Amazon programmatically. They have many different pieces of software all related to ecommerce.
And yes you can know their address if you want to, on their website they even invite you to come visit them.
They are located in SF actually, probably really close to where I live. I’d be happy to do some recon if any of you would like!
Here’s their quote on their website:
How do I know I'll be reimbursed?
We understand there's a fair amount of trust involved here, so if you have any concerns feel free to reach out to us! Shoot an email to [] and we can either get a call scheduled to answer any questions you have or even schedule a visit to the office in San Francisco so you can see what we're all about.
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Let me make sure I'm understanding this.
There is a company, that is not Amazon, that acts as a matchmaker, similar to the tradeline companies being discussed in other threads.
The people they are matching up are people like us, who are selling Amazon gift cards, and others who are buying the cards.
We are buying the cards at 95% of face value (because of the credit card cash back.
The buyers are buying at 95.25% - 96.2%, which means we make a profit of .25% - 1.2% of face value.
The company also takes a cut.
Does the company's cut come out of our profit?
Yeah, the Schedule C implications are enormous. Have you filed a tax return yet showing this income?
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This relies on violating Paypal's terms of service in order to succeed, yes? If you got one $10k payment as a normal payment you'd be hit with a ~$300 Paypal fee.
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OK, so we don't send the cards to other people, but to the company.
Why doesn't the company buy their own gift cards?
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Yes I have filed. My 2017 taxes included this large income. There are in turn large expenses that offset this on your schedule C. I have not yet been summoned for audit, but if i does happen, this company provides a full excel with all your transaction history for the full year. You will at least be able to back up all the expenses and profits with concrete data, even though it will look fishy.
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OK, so we don't send the cards to other people, but to the company.
Why doesn't the company buy their own gift cards?
Exactly right. The reason they can’t buy their own is because of the 10k/user/day limit. They cant take out unlimited credit cards, so they are stuck into this one.
This is what they say on their website as to why:
What do you need gift cards for?
[] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [] to add more supply when we have particularly high demand.
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This relies on violating Paypal's terms of service in order to succeed, yes? If you got one $10k payment as a normal payment you'd be hit with a ~$300 Paypal fee.
This is actually a really interesting question. I’ll dig more into it today and get back to you.
I’ve never had a problem where PayPal charges me a fee, even after doing this hundreds of times. I’ll call the company and get the details on how they structure the PayPal transfer to you.
Currently, I don’t think it’s in violation of their terms because the way the company structures the transfer to you. But let me call them and figure it out!
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Does the company's cut come out of our profit?
Their cut is structured like this:
1) they buy the gift cards from you at 95.XX.
2) they sell them at 96 or 97% of face value (the number is unknown to us)
3) they take the middle cut. Whatever the delta is from what they bought it to what they sold it.
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This relies on violating Paypal's terms of service in order to succeed, yes? If you got one $10k payment as a normal payment you'd be hit with a ~$300 Paypal fee.
This is actually a really interesting question. I’ll dig more into it today and get back to you.
I’ve never had a problem where PayPal charges me a fee, even after doing this hundreds of times. I’ll call the company and get the details on how they structure the PayPal transfer to you.
Currently, I don’t think it’s in violation of their terms because the way the company structures the transfer to you. But let me call them and figure it out!
https://www.quora.com/Why-not-claim-all-PayPal-payments-as-friends-and-family-payments
Because PayPal monitors all of the transactions, and merchants that are found to be using the system for commercial purposes without paying will lose access to the system.
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Tho company is not actually international. The only reason I mentioned that is because many people question why they have so much demand for gift cards.
The company is founded in San Francisco by MIT grads.
If it's a US company, then why doesn't it do its own Amazon purchasing with company credit cards?
Oh yeah, because they are setting up dozens of shill Amazon prime accounts to send items to their Ebay customers with prime shipping. Of course, this is against Amazon's TOS so these accounts get closed left and right. But the company is setting up all of these throw away accounts paying with untraceable gift cards. Well, untraceable to them. But they are traceable to the original gift card purchaser since they're the schmuck accepting all the liability from Amazon, PayPal, Chase and any applicable federal money laundering laws for a measly $50.
Between this, the pot business thread and the real estate guru scam thread, I feel like this.
(https://media.giphy.com/media/l3q2wCnKRThy8ltxS/giphy.gif)
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This relies on violating Paypal's terms of service in order to succeed, yes? If you got one $10k payment as a normal payment you'd be hit with a ~$300 Paypal fee.
This is actually a really interesting question. I’ll dig more into it today and get back to you.
I’ve never had a problem where PayPal charges me a fee, even after doing this hundreds of times. I’ll call the company and get the details on how they structure the PayPal transfer to you.
Currently, I don’t think it’s in violation of their terms because the way the company structures the transfer to you. But let me call them and figure it out!
https://www.quora.com/Why-not-claim-all-PayPal-payments-as-friends-and-family-payments
Because PayPal monitors all of the transactions, and merchants that are found to be using the system for commercial purposes without paying will lose access to the system.
Yeah that’s definitely interesting! It could be that they set it up in a different way. I’ll give them a call to check it out today.
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Tho company is not actually international. The only reason I mentioned that is because many people question why they have so much demand for gift cards.
The company is founded in San Francisco by MIT grads.
If it's a US company, then why doesn't it do its own Amazon purchasing with company credit cards?
Oh yeah, because they are setting up dozens of shill Amazon prime accounts to send items to their Ebay customers with prime shipping. Of course, this is against Amazon's TOS so these accounts get closed left and right. But the company is setting up all of these throw away accounts paying with untraceable gift cards. Well, untraceable to them. But they are traceable to the original gift card purchaser since they're the schmuck accepting all the liability from Amazon, PayPal, Chase and any applicable federal money laundering laws for a measly $50.
Between this, the pot business thread and the real estate guru scam thread, I feel like this.
This is from an earlier post in which I copied over from their website:
What do you need gift cards for?
[] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [] to add more supply when we have particularly high demand.
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This is NOT the biggest part of their business by far. They have tons of other software in the ecommerce area that leads to having this demand. That s their real business. They aren’t laundering money. This is literally just to supplement their current gift card purchasing power.
This is similar to the tradeline thread, where someone found a market for something that initially sounds scary and they are just filling that gap. In that thread, you also take on risk through various ways but it is mitigated through other ways. This is a very similar exercise in mitigating risk.
Again, everyone has different risk profiles. It’s totally up to you if you want to partake!
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Tho company is not actually international. The only reason I mentioned that is because many people question why they have so much demand for gift cards.
The company is founded in San Francisco by MIT grads.
If it's a US company, then why doesn't it do its own Amazon purchasing with company credit cards?
Oh yeah, because they are setting up dozens of shill Amazon prime accounts to send items to their Ebay customers with prime shipping. Of course, this is against Amazon's TOS so these accounts get closed left and right. But the company is setting up all of these throw away accounts paying with untraceable gift cards. Well, untraceable to them. But they are traceable to the original gift card purchaser since they're the schmuck accepting all the liability from Amazon, PayPal, Chase and any applicable federal money laundering laws for a measly $50.
Between this, the pot business thread and the real estate guru scam thread, I feel like this.
(https://media.giphy.com/media/l3q2wCnKRThy8ltxS/giphy.gif)
Hahaha...thanks for the morning laugh!
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We need @sol to troll the OP
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ptf out of sheer curiosity.
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Incurring huge charges on the CC daily and paying off the balance daily, for a Chase card. Sure!!
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What do you need gift cards for?
[] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [] to add more supply when we have particularly high demand.
Okay, I'll get hooked into responding one more time for any MMM forum members who might be reading this and actually thinking it's a good idea.
There is a legal, rule abiding way for international sellers to do the Amazon to Ebay dropshipping game. They open a US subsidiary, which allows them to obtain a US checking account and credit card. When they have an Ebay sale, a computer program automatically makes the purchase on Amazon with a non-prime Amazon account, which is fine by Amazon TOS. There are quite a few very successful companies that do this.
Any company or entity that needs tens of thousands of dollars of gift cards is doing something they shouldn't and is shielding their identity and risk through the anonymity of gift cards. Whether the company the OP posted is the end user or the middleman is immaterial. The only digital fingerprints on those gift cards are going to be the original purchasers'. Consequences range from a lifetime ban from Amazon, lifetime ban from PayPal (and they can hold your funds for 180 days or pull them back if they believe they are tied to illegal activity), lifetime ban from Chase with a ding on your credit report to legal consequences for money laundering.
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What do you need gift cards for?
[] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [] to add more supply when we have particularly high demand.
Okay, I'll get hooked into responding one more time for any MMM forum members who might be reading this and actually thinking it's a good idea.
There is a legal, rule abiding way for international sellers to do the Amazon to Ebay dropshipping game. They open a US subsidiary, which allows them to obtain a US checking account and credit card. When they have an Ebay sale, a computer program automatically makes the purchase on Amazon with a non-prime Amazon account, which is fine by Amazon TOS. There are quite a few very successful companies that do this.
Any company or entity that needs tens of thousands of dollars of gift cards is doing something they shouldn't and is shielding their identity and risk through the anonymity of gift cards. Whether the company the OP posted is the end user or the middleman is immaterial. The only digital fingerprints on those gift cards are going to be the original purchasers'. Consequences range from a lifetime ban from Amazon, lifetime ban from PayPal (and they can hold your funds for 180 days or pull them back if they believe they are tied to illegal activity), lifetime ban from Chase with a ding on your credit report to legal consequences for money laundering.
I think in the age of Trump, if you are worried about running foul of regulations you are worried about the wrong thing. No rules just right. Have fun.
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What do you need gift cards for?
[] has relationships with some of the largest bulk Amazon buyers. They use gift cards to fund their orders, and so we sell them to those sellers at a discount. We typically buy our gift cards from large b2b Amazon gift card resellers (at 5%+ discount), and we use [] to add more supply when we have particularly high demand.
Okay, I'll get hooked into responding one more time for any MMM forum members who might be reading this and actually thinking it's a good idea.
There is a legal, rule abiding way for international sellers to do the Amazon to Ebay dropshipping game. They open a US subsidiary, which allows them to obtain a US checking account and credit card. When they have an Ebay sale, a computer program automatically makes the purchase on Amazon with a non-prime Amazon account, which is fine by Amazon TOS. There are quite a few very successful companies that do this.
Any company or entity that needs tens of thousands of dollars of gift cards is doing something they shouldn't and is shielding their identity and risk through the anonymity of gift cards. Whether the company the OP posted is the end user or the middleman is immaterial. The only digital fingerprints on those gift cards are going to be the original purchasers'. Consequences range from a lifetime ban from Amazon, lifetime ban from PayPal (and they can hold your funds for 180 days or pull them back if they believe they are tied to illegal activity), lifetime ban from Chase with a ding on your credit report to legal consequences for money laundering.
Well this is for sure sufficiently scary sounding to fend off even me. I'll be looking into it and I encourage everyone to also do their own research.
What I am finding so far is that this isn't actually an international play by this company. Looking over their FAQ on their website, it doesn't mention any international business portion at all, and it may have been an extrapolation that I made in my mind. Indeed, their whole website never even has the word international, so I may have made that leap myself.
Thank you for the insightful comment, and I'll follow up with whatever I find.
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What's the name of the company? There is no rule against naming the company on the forum.
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(https://media3.giphy.com/media/3oKIPlLZEbEbacWqOc/giphy.gif)
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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 (http://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!
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What's to stop a married couple from both getting a prime account and doubling their spoils? $40/day/person is like $30k/yr total. Once you get it set up and running this seems like it has the potential to be more lucrative than the TL sales, and also much much higher $/hr.
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What's to stop a married couple from both getting a prime account and doubling their spoils? $40/day/person is like $30k/yr total. Once you get it set up and running this seems like it has the potential to be more lucrative than the TL sales, and also much much higher $/hr.
Yes, it can be quite lucrative. I have actually set up my wife on this, but it hasn't seemed to work yet. She has the credit card now, but somehow she is running into MY gift card purchase limit. That means that if I do the 10k that day, she cannot do it, and vice versa.
I have recently changed her billing address to her parents, but it still flags it as a combined limit with mine. I am working to figure it out though!
The passiveness of this can get pretty crazy. I currently have a script running on a server that will auto purchase the cards for me at the right time intervals (It happens to be every 24 hours and 15 minutes). This means I never miss a day and I never have to think about it.
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I'm curious how much longer before you get banned by Amazon and/or Paypal.
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The only reason I didn’t mention the company’s name is because I was following the model arebelspy used for his post. I assumed there were some forum rules about naming companies based off that.
This is a good model - its a lot easier to get referral $$ when you don't share the company's name outside of a DM ;)
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I have come to believe there is a gif/quote from Ron Swanson that fits just about every situation.
Case in point:
(https://media.giphy.com/media/zq5aDLYTT4oQo/giphy.gif)
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Just filing that SchC with the IRS is going to invite a lot of scrutiny. Not to mention Paypal, Chase, and Amazon. No thanks.
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Come on people, this is so frustrating!
Can't somebody offer a proper side gig opportunity to make a few clicks per day and earn 20K per year? I was hoping I could do that from a beach somewhere in Thailand while getting a massage (not the kind of massage you think about).
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Come on people, this is so frustrating!
Can't somebody offer a proper side gig opportunity to make a few clicks per day and earn 20K per year? I was hoping I could do that from a beach somewhere in Thailand while getting a massage (not the kind of massage you think about).
If side gigs were all that easy/lucrative/legal/risk-free I'd do a few few clicks a day and make $100k/yr for 15 minutes of work :P
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Yes, I would just automate these clicks, set up a click farm and make billionz of millionz per day.
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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.
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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 VERY weird... Have you applied and gotten 5 Chase cards in the last 24 months by any chance?
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Come on people, this is so frustrating!
Can't somebody offer a proper side gig opportunity to make a few clicks per day and earn 20K per year? I was hoping I could do that from a beach somewhere in Thailand while getting a massage (not the kind of massage you think about).
If side gigs were all that easy/lucrative/legal/risk-free I'd do a few few clicks a day and make $100k/yr for 15 minutes of work :P
Honestly, this is why I posted this hustle. It has been working for me for the past year-ish, and that is literally all it is: 15 minutes of work which yield tons of side hustle money. There is some risk involved, but it is definitely surmountable and there are ways to mitigate it. It's very similar to the tradeline, in that it initially seems incredibly risky, but people have found ways around it that make it considerably less so. It also treads the line of violating some terms of services etc, just like tradelines.
There has been quite a bit of backlash, but a couple of people have PM'ed me. Hopefully they will see how easy it is and start being able to vouch for it.
If there truly is no appetite for it, I am happy letting this thread die, but I just thought I would give you guys the opportunity to check it out yourselves.
Also, I'd like to say that I actually appreciate all the scrutiny. It has helped me formulate new questions I didn't think about and hopefully everything comes back positive!
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Although I did a circle of eBay gift cards from gamestop to buy gamestop cards on eBay to buy eBay cards at gamestop with the last $5 back long enough to have to create 3 eBay accounts because I maxed their limits on each account........
This is sketchy as hell. I'm out.
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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 VERY weird... Have you applied and gotten 5 Chase cards in the last 24 months by any chance?
The Chase 5/24 rule applies to all cards, not just Chase.
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I'd add civil forfeiture to your risks if you are doing amounts close to the $10k threshold. Seriously.
google it and there are lots of articles on abuse of this system for the government to take your money without actually ever charging you of a crime.
Here is just one article: https://reason.com/blog/2017/04/04/irs-seized-17-million-from-innocent-busi
However, that article implies the IRS has reigned itself in. Other articles claim this is still occurring and it's not just the IRS who perpetrates it.
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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 VERY weird... Have you applied and gotten 5 Chase cards in the last 24 months by any chance?
The Chase 5/24 rule applies to all cards, not just Chase.
I have applied for 3 cards in the last 24 months. Well, 4 cards now, counting the Amazon card I didn't get.
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I'd add civil forfeiture to your risks if you are doing amounts close to the $10k threshold. Seriously.
google it and there are lots of articles on abuse of this system for the government to take your money without actually ever charging you of a crime.
Here is just one article: https://reason.com/blog/2017/04/04/irs-seized-17-million-from-innocent-busi
However, that article implies the IRS has reigned itself in. Other articles claim this is still occurring and it's not just the IRS who perpetrates it.
Thanks for bringing that to my attention. I have added it to the potential risks section.
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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 VERY weird... Have you applied and gotten 5 Chase cards in the last 24 months by any chance?
The Chase 5/24 rule applies to all cards, not just Chase.
I have applied for 3 cards in the last 24 months. Well, 4 cards now, counting the Amazon card I didn't get.
Amazon Prime card doesn't fall under 5/24. GF got it last year and I'm pretty sure she was around 14/24 at the time.
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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?
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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.
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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!
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I can't imagine Chase keeping your credit card open for more than about a week of this.
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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.
(https://media.giphy.com/media/QV488Mkan3mve/giphy.gif)
(https://media.giphy.com/media/GNnW4vlnnu5eE/giphy.gif)
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 (http://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!
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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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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
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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.
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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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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.
Sent from my iPhone using Tapatalk
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.
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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.
Sent from my iPhone using Tapatalk
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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* 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.
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- If you don’t 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.
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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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Straight from the horses' mouth. A review of Piranha (https://www.youtube.com/watch?v=oXA8EnwLaMc&feature=youtu.be&t=1m56s) (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..."
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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)?
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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.
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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?
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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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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.
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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.
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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.
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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.
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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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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
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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.)
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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.
Sent from my SM-G950U using Tapatalk
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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.
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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.
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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.
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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.
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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.