Today I’m looking into the idea of “cash gifting.”
What really is Cash gifting, a scam? Is it even legal?
Well, to start off there is a big difference between cash gifting and cash gifting programs or systems.
Cash gifting is exactly what is says on the tin…
The act of giving another person, an oragnisation or charity money – as a cash gift.
There are no ties to that gift, no business, no products are exchanged. You give the cash and that is it. You’re not expecting a return.
Of course, we can imagine there are plenty of times in every day life where we may give someone a cash gift…such as on birthdays or Christmas, for example. This is totally legal and something many of us will partake in.
But cash gifting programs are very distinct from this, as they will involve putting in a sum money in the program- in the hope of getting significantly more back.
It’s expected that 90% of people that become involved in a cash gifting program, will lose money.
Is Cash Gifting legal?
Of course cash gifting in the traditional sense is completely legal, but there are some legalities depending on how much the cash gift is for.
For example, if the cash gift goes over $12k in the US then you will be libel to pay tax.
As long as it’s within certain parameters, you’re fine.
Cash gifting programs or systems, by contrast, are in fact illegal in many countries – because they’re considered to be pyramid schemes.
These programs attempt to hide the fact they’re pyramid schemes by adding extra elements to make them appear to be more of a legitimate business.
For example, they may have some product or service that’s meant to be attached – when it actually has nothing to do with it.
Many of these programs can fly under the radar for years without being shut down.
Cash Gifting programs:
These programs will normally involve cash being sent in the mail – you send a cash buy in to the person who invites you, you then get other people on board to mail cash to you and so on…
Cash gifting programs really stretch the whole idea of a cash “gift”.. because, while you are giving a cash “gift” to someone, you fully intend to get that cash back + more as you go on.
The idea behind these programs, of course, is to make money. But since cash gifting in itself by its nature is giving and not receiving anything in return –clearly this doesn’t add up.
Generally these programs will work by having a “buy in”… this buy in could range into thousands of dollars.
For example, one program I just reviewed called “too damn easy” has a buy in ranging from $2000 – $18000.
But since cash gifting should involve no expectation of receiving any money, product or service in return… then legality wise there are question marks over this money being “tax free…”
How exactly can putting this money into a system, while expecting a return – be classified as cash gifting in legal terms? People are only putting money into the system to reap cash rewards.
But that’s not the only problem legality wise.
If there is no tangible product or service in place that people are paying for and the whole purpose of these system is to recruit others into it – then straight up, this could be considered a pyramid scheme.
A pyramid scheme can be defined below, (source wikipedia)
In the case of too damn easy and other similar programs – they certainly seem to be based on this promise of cash by enrolling others on to the scheme, rather than any tangible products or services.
As well as potentially then being deemed illegal, you could also certainly land into some TAX issues if you try and claim any large sums of money you’re “gifted” are tax free.
Cash gifting programs try and sell these programs on the basis you can make some tax free cash – but be cautious, you could well be in trouble with the tax man if you’re caught out…
clearly participating in these schemes are not in any way “cash gifting” in the traditional sense.
So, do cash gifting programs work?
That really depends on what you mean – if you mean: can you make money from them?
Then the answer is yes – most definitely some people do.
But you can also loose a lot of money too and make nothing. As I stated previously, somewhere around 90% are thought to lose money.
These sorts of programs don’t work in the long term because they aren’t sustainable – sooner or later, they collapse and many are closed down.
That being said, some programs may manage sustain themselves for years before that happens.
Basically, to participate in this sort of program is a big gamble in a variety of ways, but there is also a moral issue with bringing people into something like this –
You may say, that people going into a cash gifting program are taking their own risks with their own money – they go in with their eyes open, so what’s the problem?
Well, very often people do not go into these things with their eyes open at all – they’re promised a great deal and then end up losing out big time.
Often people will go into these sorts of programs out of sheer desperation too, they’re massively in debt, they have to support their families and so on – they will take a risk because they feel like they’re at the end of the road.
These are the kinds of people that are taken advantage of with these programs.
So, are cash gifting programs pyramid schemes?
Some cash gifting programs claim they aren’t pyramid schemes because they have a “one-up” system – which is structured very marginally differently.
All it means is, once you recruit somebody on to the scheme – your initial very first payment goes to the person who originally invited you on to the program…
It’s the same for who ever you recruit. Your recruit will have to send their first payment from their first invite to you and so forth.
As pyramid schemes/cash gifting programs in the traditional sense are illegal, this was some effort to try and avoid this – but not a very good one.
Why this difference means nothing….
As we distinguished earlier – pyramid schemes are simply based on recruiting others, with no product or service available for purchase.
In the case of one-up cash gifting, the money you pay to join, goes to the person who recruits you.
The only difference from here – is that your first initial payment from someone, then goes to the person who invited you once more.
But from there on in, the structure is identical to the regular cash gifting schemes.
The way you make money is still by trying to relentlessly to recruit others, who then go on to recruit more people – without any product or service available to buy.
Doesn’t this still sound very much like a pyramid scheme to you?
It’s a recruitment scheme, plain and simple.
The Failure Rate Of Pyramid Schemes Is High
The more people that join these schemes, the higher the rate people need to be recruited in order to sustain the structure in place.
People are far more clued up on pyramid schemes now – people are weary of being caught up in a scam, so they google these schemes and programs and will regularly come across an article on a website exposing it for what it is.
It’s alarming how long some of these scams can keep running with the amount of bad reviews that undoubtedly come their way.
Many scams could be live for years before being shut down – people claim that if something was illegal, it wouldn’t be around.
That’s just not the case – plenty of illegal scams run for a long time before enough evidence is gathered to close them down.
In any case, eventually the seemingly never ending sea of recruits dries up and program crumbles.
Even with this altered “one-up” system…. you’re still relying on consistently benefiting from new recruits in order to make money.
If not cash gifting – then what?
I’ve reviewed a lot of programs and ways to make money online and, by now, I can spot a scam from some distance away.
There are a lot of desperate people searching the internet, hoping they can make a tonne of cash overnight – but there is no quick way to making a fortune online.
But there are plenty of people willing to take advantage of that desperation and desire that many people have – to make money doing very quickly, doing very little!
Being involved in a cash gifting system – even if you’re in the top 10% that does make any money whatsoever, is an extremely risky way of going about making money online.
Ultimately, it’s a temporary option and not a way of creating a sustainable long-term business!
I have a few programs that I do recommend- feel free to browse my review tab at the top of this page.
Alternatively, check out this program – I’m a member there too It’s a training platform – not a “get rich quick” scheme…you can check it out for free.
All the best… 🙂