Secret Sisters Gift Exchange being called illegal pyramid scheme

ST. GEORGE – Over the last several weeks, the “Secret Sister Gift Exchange” – which promises participants numerous free gifts in exchange for sending just one to another recipient – has taken over Facebook.

There’s one big problem, though – it’s classified in the United States as an illegal pyramid scheme, according to the U.S. Postal Inspection Service.

The gift exchange encourages women to sign up for a “secret Santa”-style present swap with strangers.

Women are instructed to send a gift of at least $10 in value to the person at the top of a long list of participants, which has been sent to them. After sending the gift, participants are directed to remove the person in first place from the list, bumping up the second name to the top.

They then add their own name and mailing address to the second spot on the list. Finally, perpetuating the scheme, they are directed to send the updated list to at least six other women, who are directed to do the same.

The idea is that each participant gets up to 36 gifts as more people join the exchange and receive the list. The idea behind the “exchange” is similar to chain letter exchanges that were popular in the 1990s.

Notwithstanding, the Secret Sister Gift Exchange fits the definition of a traditional pyramid scheme, as with most ideas that promise big returns on a small investment.

According to the U.S. Postal Inspection Service:

There’s at least one problem with chain letters. They’re illegal if they request money or other items of value and promise a substantial return to the participants. Chain letters are a form of gambling, and sending them through the mail (or delivering them in person or by computer, but mailing money to participate) violates Title 18, United States Code, Section 1302, the Postal Lottery Statute. (Chain letters that ask for items of minor value, like picture postcards or recipes, may be mailed, since such items are not things of value within the meaning of the law.)

When something sounds too good to be true, it’s because it probably is. In fact, the odds of having Santa Claus deliver the gifts himself are likely greater.

While women who initiate these schemes do have a small chance of receiving a gift as the gifts start to flow, it’s mathematically impossible for the exchange to sustain itself or for those who join later to ever reach the top, according to the Postal Service.

“It’s worth noting that amid the myriad enticements for such initiatives on social media, many users expressed interest and committed to the exchanges,” according to “But while a handful of individuals claimed to have received a single gift, none reported an avalanche of $10 trinkets arriving at their doors. Had such a plan ever borne fruit, accounts of such success mysteriously remained virtually non-existent.”

While many people can easily identify the gift exchange as the pyramid scheme it is, not everyone has been so quick to see the holiday scheme as an illegal, glorified chain letter, and they unknowingly become involved in the illegal activity taking Facebook by storm.

One person commented on Reddit: “i figured it was a pyramid scheme, but it’s odd because the friends sharing this message are very intelligent people. i wouldn’t have expected them to fall for a thing like this.”

It’s also important to note that not only are pyramid schemes like this mathematically impossible as the list of participants multiplies into billions of people a few steps into the scheme, but they also violate Facebook’s terms of use.

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Twitter: @STGnews

Copyright St. George News, LLC, 2015, all rights reserved.


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