‘Holiday wine gift exchange’ is a pyramid scheme

The Wisconsin Better Business Bureau (BBB) reports this year’s shady holiday gift exchange comes with a new twist – wine. If gifting one bottle of wine and receiving dozens in return sounds too good to be true, that’s because it is. This seemingly harmless gift exchange is really a pyramid scheme.

How the scam works

You are scrolling through social media, when you see an invitation to participate in a wine gift exchange. One common version reads: “Hi wine drinking friends! Let’s do a holiday wine exchange. I did this last year and received so many bottles of wine!” The post explains that all you need to do is buy a bottle of wine and send it to another participant. Then, share the invitation on your own social feed. In exchange, you’ll receive anywhere from six to 36 bottles of wine.

Sounds great, right? The trouble is that this is a pyramid scheme. It relies on recruiting new individuals to keep the scam afloat. Once people stop participating in the exchange, the gift supply stops as well, and leaves disappointed participants without their promised gifts Pyramid schemes are illegal in the United States and Canada. The U.S. Postal Inspection Services explains that these gift exchanges are considered a form of gambling and that participants could be subject to penalties such as jail time, fines or a lawsuit for mail fraud.

Tips to avoid these scams

Report social media posts. If you receive an invitation to join a pyramid scheme on social media, report it. On Facebook, report posts by clicking in the upper right corner and selecting “Report post” or “Report photo.” On Instagram, tap the three dots above the post and then tap “Report.”

Never give your personal information to strangers. This will open you up to identity theft and other scams.

Be wary of false claims. Some pyramid schemes try to win your confidence by claiming they’re legal and endorsed by the government, or even BBB. These claims are false, so don’t believe them.

Learn more about the gift exchange scams that are popular on social media. For more holiday scams and seasonal tips, see BBB.org/HolidayTips.