notice how amazon gift cards go for higher than face value on ebay
https://www.ebay.com/sch/i.html?_from=R40&_nkw=amazon+gift+c...
My only logic is that its a form of money laundering.
https://www.ebay.com/sch/i.html?_from=R40&_nkw=amazon+gift+c...
My only logic is that its a form of money laundering.
These days though, I just torrent more often than not. It's just too much work trying to pay for the content I like.
That doesn't really make sense. Why buy it online leaving a papertrail (ebay account, bank/credit card transactions), when you can buy it anonymously in person using cash? The daily volume also isn't there. It's a couple thousand dollars per day at most. You can easily get that amount in person without raising any suspicion by driving to different stores in your city.
I.e, a $10,000 outside "investment" allows you to sell 100, $100 gift cards for $120. Those profits get reinvested on the books, and now you have $12,000 to sell 120, $100 gift cards. Lather, rinse, repeat.
With a car was, 1000 washes, at 5m per wash is 84 hours of active operating time. This creates an upper limit on the amount of money that can reasonably flow through the company, since 84 hours is roughly 3 hours a day of utilization per month. You might be able to get by with about double that many washes without raising suspicion. But all it takes is a peak at the company's water bill to determine how accurate that figure really is.
Plus the operating expenses are much higher, as it requires a specialized building, land, etc. Whereas the online retail requires a computer and some software. It's easier to move and hide. There's just so many benefits to using online retailers over brick and mortar operations.
What kind of a mom and pop store sells $3M year in amazon gift cards?
You set up a bank account and amazon seller account you control in someone else's name. Then you use your stolen CCs to buy the "book" from yourself thereby converting credit card details into money in an account you control. From there you can get the money out in a multitude of ways (or launder it again through the same or another method) depending on your risk tolerance.
why not just buy it from amazon directly? does ebay/paypal have looser anti-fraud systems than amazon?
>You set up a bank account and amazon seller account you control in someone else's name. Then you use your stolen CCs to buy the "book" from yourself thereby converting credit card details into money in an account you control.
That doesn't work because if you funnel a bunch of stolen credit card purchases into that account, it will quickly get flagged for an unusually high chargeback rate.
Every additional step is an additional level of obfuscation.
I don't get what you mean by "buy it directly". You don't want the book and you don't want to be buying things for yourself using illegitimate money.
>That doesn't work because if you funnel a bunch of stolen credit card purchases into that account, it will quickly get flagged for an unusually high chargeback rate.
I shouldn't have mentioned CCs. Nobody is buying $500 books with credit cards that are likely to charge back. You generally use those for drop-shipping scams where you list $5 toilet brushes for $4.95 on another site and then use the stolen CC to pay. Say you list on eBay and buy on Amazon, the people will dispute Amazon charges but it doesn't matter because the happy customers of your eBay account are getting their $4.95 toilet brushes just fine. $500 books could be an intermediary step where you have $24k sitting in a sketchy account you control (toilet brush business is booming) and you need to siphon it out. You'll be the only one buying the book so no charge-back risk.
I took it to mean buying the gift cards from Amazon/physical store, rather than going through ebay.
We just keep going back and forward between you and I, always getting the $1k Credit Card sign up bonuses and a TON of points each month.
[edit] - I'm not sure parent comment was replying to the gift card point. My comment was specifically about why buy Amazon Gift Cards from a third party ever.
E.g. most German cards don't work at amazon.com (unless things have changed recently), but work at PayPal.
If you're doing an online purchase you can combine with a coupon collector site, credit cards, and gift cards to get steep discounts. When I shopped at H&M their gift cards regularly had 15-35% discounts from gift card sites and they will accept any piece of fabric in store for a discount coupon, making the clothes close to fifty percent off in total.
When shopping online it adds possibly two minutes extra to check out once you get used to the flow. It's not recommended for gifts as it mucks up the return flow but gift cards are usually only for large retail outlets so it's always possible to hold on to it and purchase something later.
This is all legitimate use and not a flow for money laundering.
But this also a good way to launder money, most often for low-level drug transactions. Drug addicts steal credit cards or pass bad checks to buy gift cards. Then either give the cards to a dealer directly, or to a broker. The broker gives them cash, which they take to the dealer.
People can also abuse return policies. Most places will give you a gift card if you return unused merchandise without a receipt. So people will shoplift small, high-value items from one store and return them to another. Get a gift card, and then sell the gift card. The cash isn't traceable, and the broker gets a tidy profit.
Usually only if you paid with a credit card, so there's a record you made the purchase no?
Most places typically will provide the refund if you have the merchandise and an ID. The ID helps loss prevent determine if someone's returning an abnormally large amount of goods, but there's no shortage of mules for this kind of scam.
I'm not in the loss prevention field (anymore), and my knowledge of these sorts of scams is a few years old.
No. Usually, if you can prove that you made the purchase at the store, by any acceptable means, they will refund you (for credit card purchases, usually exclusively to the card used for the purchase).
If you can’t, but they let you return anyway, they’ll typically give you store credit (if they don’t issue gift cards) or a gift card, so that the “money” you get ultimately is going to be spent at the store (or not at all.)
> Usually only if you paid with a credit card, so there's a record you made the purchase no?
This makes absolutely no sense. If the store demands that it demonstrate to you that it knows you made the purchase, before it will allow a return, then you can easily demand to be refunded in cash. What purpose would the receipt serve?
Buy gift cards with a stolen credit card
Sell the gift cards for cheap to random people on the internet for crypto
"Money laundering is the illegal process of concealing the origins of money obtained illegally by passing it through a complex sequence of banking transfers or commercial transactions. "
I'm not sure how turning stolen CCs into money is fundamentally different.
As far as I understand it, the process of moving money through complex transactions is to make it look like it came from somewhere legitimate and making it hard to trace back to something that isn't, by mixing it with legitimate funding in a hard-to-see way or by making it come from an otherwise legitimate source[1]. The goal of money laundering is being able to point at a legitimate source and being able to claim that's where the money came from and the complex transactions are meant to make it look plausible or at least hard to disprove.
[1] eg: if I pay a utility bill with illegitimate funds and overpay and then they refund me, that refund may be seen as laundered, because the utility company is legitimate, which is why they tend to have restrictions around such things -- I came across this example when I was doing anti-money laundering training when I did contract work for a bank recently, although admittedly I might not be remembering all the details correctly.
some argue above that there's no fraud involved, it is people simply doing manufactured spend, that makes little sense to me, as there are cheaper and simpler ways of doing manufactured spend (I've done it!). Heck, just buy the gift cards direct from amazon.
> Heck, just buy the gift cards direct from amazon.
Indeed, unless you're out to commit fraud or legal-definition-money-laundering, there seems little point in jumping through the hoops.
I know, $5 isn't much, but it is still lower than face value.
Remember Amazon has the credit card fee margin of savings if someone uses a gift card instead of a credit card.
This is made possible at least in part because they have savings on the credit card cut
They have to sell it to retailers for less than they'd get after credit card acceptance. E.g. Apple sells gift cards for $88/$100 to a retailer, who then uses the remaining $12 on transaction costs (including paying their credit card fees) and profit margin.
Vs. Apple likely loses ~2% on credit card acceptance-- and gets to keep $98/$100.
It's still worth it, because they capture money from last-minute gifts, etc...
Though $88/100 is super unrealistic with margins on electronics of 1-2% Amazon would be taking a loss of what the profit from 10 laptop sales every time they dealt with someone buying a laptop all in gift cards.
Or maybe gift cards are so rarely used in this way they write it off with higher margin uses
The store issuing the gift card is out of the town center and I have had it for ages. Make me an offer and, if I get enough booze or contraband for now/tonight then I am happy.
Gift cards are always cheaper than face value. The basic economics tells you they can't be more expensive than that, since they are similar to money, but worse. They can easily be cheaper; $300 at Starbucks is not as good as $200 wherever you want.
Your incredulity is pretty shocking; if you want to see gift cards sold cheaper than face value, all you need to do is walk into a Costco.
Where does your experience come from? It seems appallingly out of touch.
When Apple, Amazon, etc, seek to have retailers carry their gift cards, the retailer needs to have an incentive. So the gift cards are usually sold for below face value to the retailer. In turn, some retailers will sell gift cards for below their face value.
So, e.g., at this moment, Nintendo eShop $50 cards are $44.99; XBox/Sony Playstation $100 gift cards are $89.99; a $500 gift card on Alaska Airlines is $449.99; $100 at Hulu is $89.99.
These are not particularly good prices. Oftentimes Apple $100 gift cards will be $79.99.
The other incentives at Costco still hold, too; you can get the Executive Membership 2% back and the 2% credit card cash back.
Where gift cards are available, they are never cheaper than face value due to basic market dynamics.
In retail stores in non-Western countries I have never seen a gift card with e.g. 100 unit value sold for less than 100 units either, although I haven’t specifically looked for such.
In degenerate cases, I can see that the reverse could be true.
In this thread, a fundamental misunderstanding of how gift card market works seems to prevail.
There’s basic arbitrage. Vendor Acme in region X locks out people from region Y (e.g., based on payment method address); Alice lives in region X and can buy an N value Acme gift card for N-1 at a local store; Bob lives in region Y and wants to transact with Acme; Alice buys a gift card for N-1 and sells it to Bob for N+1 online; Bob gains the ability to transact with Acme, Alice gains 2 as revenue.
Thus, gift cards going for higher than face value does not automatically imply anything beyond a market acting as it should and is not specific to Amazon in any way.
You... are aware that the primary market for USD-denominated gift cards is US residents, right?