If a ‘Secret Sister’ asks you to be a part of her gift exchange, you might be swindled for your kindness.

The ‘Secret Sister’ gift exchange campaign quickly became popular several years ago through social media posts promising participants would receive multiple gifts in exchange for sending one gift.

Each holiday season, these schemes come back with new variations disguised as holiday cheer.
One version of this scam revolves around exchanging bottles of wine or bourbon; another suggests purchasing $10 gifts online. You might see references to receiving “happy mail” or doing the exchange “for the good of the sisterhood.” During the 2024 holiday season, be aware of variations of this theme that may crop up on social media.

“The holidays are a time of giving, and it sounds wonderful to be able to pay it forward by sending an anonymous gift to someone else,” shared Neesha Hothi, Director of Marketing, Better Business Bureau (BBB) serving Mainland BC.

“The problem with the secret sister gift exchanges is that often someone gets left holding the bag, or empty stocking. These are essentially pyramid schemes that rely on your participation. Once that stops, the scheme unravels.”

How this scam works

The scheme starts with a convincing invitation, either by email or social media, to sign up for a great, fun program. All you must do is provide your name, address, and the personal information of a few additional friends to add on to a list that’s already started of people you’ve never met on the internet. Next, it’s your turn to send an email or social media invitation to join the gift exchange and send a modest gift to a stranger along with their friends, family, and contacts.

A newer twist on the idea asks you to give your e-transfer email and ask users to pick a name off a list and send money to strangers to “pay it forward.” There was another new twist called “Secret Santa Dog,” in which you were asked to buy a $10 gift for a “secret dog.”

In all of these versions, you give away your personal information, and you’re left buying and shipping gifts or money to unknown individuals, hoping that someone else will reciprocate the favor by sending the promised number of gifts in return. Unfortunately, it often doesn’t happen.

Like any other pyramid scheme, it relies on recruiting individuals to keep the scam afloat. Once people stop participating in the gift exchange, the gift supply also stops, leaving hundreds of disappointed people without their promised gifts or cash.

Reminder: Pyramid schemes are illegal in Canada.

Pyramid selling focuses on generating profits by recruiting others and not primarily from the sale of products. Thus, even when these schemes offer products, the products may have very little value, or few incentives for their sale. It is a criminal offence to establish, operate, advertise, or promote a pyramid selling scheme.

Participating in these schemes poses another layer of danger. When signing up, the alleged campaign organizer asks for personal information such as a mailing address or an email. With just a few pieces of information, cyber thieves could expose you to future scams or commit identity theft.

How to avoid similar scams

• Ignore it! Keep in mind that pyramid schemes are international. Chain letters involving money or valuable items and promising big returns are illegal. Stop and ask, is it worth breaking the law?
• Report it to the social media platform. If you receive an invitation to join a pyramid scheme on social media, report it to the platform.
• Never give your personal information to strangers. Even your mailing address can expose you 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. These impostor schemes are false, as the government will never endorse illegal activity. No matter what they claim, pyramid schemes will not make you rich. You will receive little to no money back on your “investment” or gift exchange.

Stay safe this holiday season with BBB’s expert tips on avoiding common scams. 
If you’ve been the victim of a scam, report it to BBB Scam Tracker. Sharing your experience can help others avoid falling victim to similar scams.

Better Business Bureau Mainland BC & Yukon Territory

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