‘Secret Santa’ Scam Alert: Why This Holiday Scheme Is Dangerous—and Even Illegal
Discover why this festive-looking ‘Secret Santa’ program is illegal and how to protect yourself
Joining in a Secret Santa gift exchange with co-workers, friends or loved ones is a fun way to surprise someone with a present. But a variation of this concept that has returned for the holiday season is not an act of kindness—it’s a scam that’s actually illegal. Keep reading to learn more about the “Secret Santa” scam officials are warning the general public about and why this scheme belongs on the naughty list.
What is the Secret Santa scam?
Although this scheme isn’t new, it continues to evolve with each holiday season to make it easier to dupe people. On social media it’s often known as the “Secret Sister” gift exchange and claims that it’s done for the “good of the sisterhood.”
Anyone who participates could allegedly receive up to 36 gifts in exchange for sending just one, shares the Better Business Bureau (BBB). The idea is that you’ll make someone’s day with a delightful present, and get some gifts of your own in return.
How does the Secret Santa scam work?
The scam usually starts with a positive and uplifting invitation via social media or email, encouraging you to sign up for the program. Once you decide to join, you will then provide your personal information (including name and address) and be added to the list of participants. In most cases, this list is composed of people around the globe whom you have never met.
Sometimes the scheme has a theme, such as exchanging bottles of wine or bourbon. But there are also two variations the BBB has warned people about for the 2024 holiday season.
The first? You will be asked to give an e-transfer email, which is generally instructions on how to retrieve or send funds, as well as must-know security information. Then to partake in the gift exchange, you pick a name off the list and send money to a stranger to “pay it forward.”
Another version being mentioned is one called “Secret Santa Dog.” One Reddit thread from five years ago highlights a social media post advertising this very scheme. It reads, “I’m looking for dog owners interested in a holiday gift exchange. Doesn’t matter where you live in the U.S. – you are welcome to join! You have to buy one gift valued at least $10 and send it to your secret dog.”
The post then promises that you will receive 6-36 gifts in return for your own dog that you can either keep or donate. Interested participants were encouraged to reply, “I’m in!” to join.
Why the Secret Santa scam is dangerous
Though it may seem like a fun concept and a festive way to spread a little joy, the Secret Sister exchange isn’t being done with good intentions. It’s actually considered a pyramid scheme, which is illegal in the U.S. As the BBB shares, “The U.S. Postal Inspection Services explains that these gift exchanges are considered a form of gambling and that participants could be penalized for jail time, fines, or a lawsuit for mail fraud.”
But that’s not the only risk involved with this scam. If you don’t know the person promoting it or those who are participating, you are giving away personal information that can be used to target you for future scams.
Finally, there’s also the risk that your gesture won’t even be returned. “You’re extremely unlikely to receive anything for your contribution while the person at the top is likely to receive most of the gifts—if not all of them,” one Reddit user commented in another thread discussing these schemes.
This is due to the format of a pyramid scheme. If enough people aren’t recruited, then the entire concept falls apart. That means the gift supply will stop, even if you have been promised other expected presents and haven’t received them.
How to stay safe
To avoid getting caught up in this scam, there are a few things to keep in mind if an offer should pop up on your social media feed or in your email inbox.
- Ignore it. Unless it’s a private gift exchange between friends where everyone swaps gifts, there’s likely a big return being promised between strangers. These schemes are illegal, so it’s best to avoid partaking in them.
- Report it to the social media platform. This ensures that others don’t fall for the false promises.
- Report it to the U.S. Postal Inspection Services. Doing so can keep the scheme from spreading.
- Avoid providing your personal information. Giving strangers your address, email and other details can make it easier to send you phishing emails, loop you into brushing scams and more.
To stay safe, only partake in “Secret Santa” exchanges with people you know, or donate to a legitimate charity if you’re hoping to pay it forward!
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