Who profits from a secret exchange

When a deal is too good to be true, it breaks my heart to see Winkies wavering between participating and retreating.  If they participate, they are giving from their heart and who could blame them for being taken advantage of?  If they retreat then they feel guilty from turning their backs on well-meaning friends.

If they voice their opinions to their friends that it might not be a good idea they suddenly become the negative person everyone wants to avoid.

The most interesting charity chain mail I saw was a couple of years ago.  I received a letter from an “organization” I had never heard of and couldn’t verify.  It had a dollar in it and told me to send back/forward two dollars.  They called this seed (aka investment) money and I would receive more money in return.  The letter shared stories from all the previous contributors and promised I would be blessed for following through.

I took the dollar and spent it.

Recently the Independent shared the details about the latest secret group exchange making the waves on Facebook.  When I first saw that offer I have to admit, I was initially attracted by it.  I also knew what it was.  If I had a trigger point it would be books.  Sadly this is not the first time this sort of thing has happened.

How many of the 10 Biggest Ponzi Schemes in History do you remember?

Ponzi and Pyramid schemes are terms we like to use for financial investments… but what about a small lottery type “investment” that has a better chance of flying under the radar? The kind of exchange that was more of an annoyance and harder to prosecute? Well someone figured out that we are suckers for wining the lottery.  Now they bank on our participation, knowing that very few will report a time consuming request chain based on good intentions.

The latest trend is called a “secret exchange” or a “gift exchange” in an effort to distance it from the definitions of sweepstakes and chain letters.   Snopes.com posted an article that pointed out that the U.S. Postal office still views this as a form of illegal gambling.  (Chain Letters themselves are not illegal, only when they request something of value.  Pretty much anything over 5 cents.)  They advise if you do receive one of these request through the mail to turn it over to your Postmaster or Postal Inspector right away.

Don’t blame yourself if you already fell for it.  They design these requests to prey on kind hearts, like yours.  They become more enticing and more convincing every year!  What you can do is decide to educate yourself on how to spot a secret exchange or gift club scam.

Throw up red flags and walk away when you see this;

  • Is it facilitated by someone who appears credible?  The originator is a person who is easy to believe and energetically recruits others to participate.  The process self replicates because each person in turn sell their own credibility in the fallacy that they think they are in good company.  On the tail end of things they may go to great lengths to defend their credibility, instead of acknowledging they made a mistake.

do you trust me

  • There is a cheesy testimonial.  Sometimes people are so excited about the potential of an idea working that they will vouch for it.  Most of the testimonials were crafted to reassure you that it works.  Ask for evidence and proof of this working for them before agreeing to participate.  As much as you may like the person, always be wary of the over confidence of something yet to be unveiled.
Calvin and hobbes chain letter
GoComics – Calvin and Hobbes January 07, 2012
  • Notice what the person who asked you to participate gives or receives.  If they were selling you a product than this means they are receiving a payment.  If this is a gift giving program, did they really receive their gifts?  What really motivates the person who invited you?

Let us pretend that in the world of Photoshop they suddenly provide something -How can you know?

  • One thing you should keep in mind is if you received a request on Facebook you should know upfront that this type of gift exchange violates Facebook’s terms of use.  Report it as spam.

You will not engage in unlawful multi-level marketing, such as a pyramid scheme, on Facebook.

  • A scam takes on a life of it’s own.  The person who profited from it is long gone by the time it starts to fall apart.  They know they can’t control it once it’s in motion.  In the case of the books; at a $10 (min) for 6 books you are committing to send essentially a $60 investment into the idea that you are expecting 36 books (a minimum of $360) in return.  Who or where is that guarantee coming from?
  • The benefit of the deal outweighs your concerns but the math doesn’t add up.  Take a piece a paper out and visually reproduce the instructions given to you. Draw circles and lines.  If you did this right you will come up with a mess.  Unless you know Calculus and understand Geometric Progression.  Which if you understand it well enough, you know that it is not sustainable.  (Basically if it worked the world would constantly post about all the cool books or gifts they received!)
U.S. Securities and Exchange Commission


The exchange requires you to volunteer your personal information to a stranger.  Your address, your name, possibly even your ages.  Participating in one scam is a good way to volunteer your information for another.  You may know the person who invited you (or who you in turn will invite) but this lulls you into a false sense of security and makes you vulnerable.

  • Look at the wording.  The life cycle of a scam depends on the way they target a specific group or demographic.  With time you can spot the keywords they use.   A scam knows what it looks like and will reassure you by saying “it is not a scam.” A legit deal never has to defend itself.  It will always be able to stand on its own merits.

Here is what you can do instead.

Gifts for the neighborhood! Now for the fun part… trying to figure out who is still home for the holidays!

A post shared by Christine Cline (@keeponwinking) on

Do you remember the idea of a Secret Santa?  You draw a name and then you give them a gift without knowing about it.  It works because you generally know the person and you are only giving and receiving one gift.  It’s legal and fun.  So is hosting a book exchange or book drive among friends.

Donate a book

Better World Books

Want the book for yourself? Go online

We Give Books

First Book

Find a Book Giveaway

Good Reads

Think about Sponsoring a book giveaway!  Whatever you do, if you genuinely want to participate with the best of intentions, plan something with people you know.  I am betting you will have a better turn out with people willing to meet you on the same level.

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3 Responses to “Who profits from a secret exchange”

  • Very good info & so true. When I seen the book thing in fb & everyone sharing it I was like dummies don’t fall far it. Abt 13 yrs ago I had a co worker try to get me in a pyramid sceme. I shut him down so fast he never talked to me again. Lol

    • Thanks Sookie! It’s nice to hear someone say they appreciate the post. 😀 I hope writing this will help someone who doesn’t know any better to ask the right questions!

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