Cash Gifting has been around for a few years now and on occasions you will see them marketed as “home business opportunities”. Cash gifting is built around the concept of just sending cash gifts to people. To join these types of schemes, you send something like $5 to 5 different people in their organization (some of them have set up fees to start out). As you refer other people into the ‘program’, you also become part of the organization and are set up to receive cash gifts from others who join after you. Programs like this vary widely, but that’s a general description.
Sound like a pyramid scheme? Pyramids in disguise? In researching some of them, I determined that what keeps them legal is in their structure. If they avoid a actual pyramid structure (by technical legal definition), they can claim to be legal. They often rely on IRS Publication 950 as ‘proof’ of their legality. Indeed, there is technically nothing illegal about the act of giving cash as a gift.
However, this is not a sustainable business as it relies only on people who join the program – there is no product or service. Furthermore, I don’t know how anyone can even call it a business although you would have to market it like a business. They never seem to be around for very long – I wonder why not?
This is nothing more than a newer generation of the old ‘chain letter’ concept where you were supposed to send $1 to 5 people or something like that. If you’re looking for legitimate, sustainable (and respectable) home based businesses, avoid cash gifting schemes. Final note; I have yet to meet anyone who has actually made any decent sustainable money from these schemes.