While the thought of receiving dozens of white elephant gifts in the mail from complete strangers sounds, uh, tempting—there is one big catch.
The secret sister gift exchange has made its way around the social media-sphere in the last couple of days as we approach the holiday season. While not entirely new, the program still manages to find its way around Facebook each year despite being illegal. Yes, illegal. Technically, the secret sister gift exchange is a ponzi scheme—or pyramid scheme as they’re also called, which is illegal in many countries.
The postal service has warned users against buying into this common holiday scheme because most people won’t receive anything at all. The only way for things like this to work would be for each member of the gift exchange to go on and find dozens of new recruits to also buy in. Remember when that girl in high school you secretly couldn’t stand started selling essential oils on Facebook—it’s a lot like that.
The secret sister scam aims to attract a largely female audience and invites users to join by simply commenting on the post. It uses verbiage to attract participants by suggesting that getting involved in the gift exchange will bring light to someone’s holiday. The catch, though, is that you’re probably just throwing your money away.
Here’s a copy of the viral post: “Secret sister is back! I am looking for six or more ladies interested in a holiday gift exchange. Doesn’t matter where you live – you are welcome to join. You have to buy one gift valued of at least $10 and send it to your secret sis. (Hello, Amazon!) you will then receive 6-36 gifts in return. This is so much fun! I loved sending a gift to a complete stranger knowing that she would have a bright spot in her day because of what I sent. Let me know if you’re interested, and I will send you information about your sister. We could all use some happy mail! Who’s in? I tagged a few I thought might be interested, but anyone is welcome to join the fun! Just comment “I’m in.”
The Better Business Bureau describes ponzi or pyramid schemes as a form of fraud. The initial schemer begins the scam by coming up with a way to get investors (or in this case, participants) to buy in to his or her idea. Next, those investors must find more investors in order to make their money back, and so on. What ends up happening is that rarely, if ever, do the investors or participants on the lower end of the scheme get their investment returned at all.
Schemes such as these are all too common on social media. A program similar to the secret sister gift exchange goes viral every now and then using the same idea but with books. Users buy into the scheme by sending one book to someone with the promise that they would receive quadruple of their investment back.
If you’d like to give a gift to a stranger this holiday season, maybe check out some good old fashioned fundraisers or groups to give to instead. You could even volunteer somewhere. Here is a list of ways to give back this holiday season.
Julia Sachs is a staff writer at Grit Daily. She covers tech, entrepreneurship and entertainment news and is based in Park City, Utah.