Thread Options
#1089169 - 11/28/08 07:08 PM Gift Card Question
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
We have started selling gift cards that are not reloadable and that are not redeemable for cash. We know that we have to register any card over $500 with the company, but is there a reg. that specifically adresses this. Compliance thinks its a good idea to register every card, no matter the amount, managment thinks its undue work.

Any help would be appreciated!

Return to Top
BSA/AML/CIP/OFAC Forum
#1089197 - 11/28/08 07:35 PM Re: Gift Card Question mdog76
Bobw Offline
Gold Star
Bobw
Joined: Nov 2006
Posts: 336
New England
Are you doing an OFAC check on those sold? I attended a BSA Conf in May and they said this is a tool that folks are using to launder money, but the biggest concern was with reloadable.
_________________________
just my opinion, based on my 30+ years

GO RED SOX!!!

Return to Top
#1089203 - 11/28/08 07:39 PM Re: Gift Card Question Bobw
mdog76 Offline
Platinum Poster
Joined: Jan 2007
Posts: 645
not to my knowledge. If we register the cards, the company will run OFAC automatically. Management wants to see in black and white if gift cards have to be registered. If not, they will not do it.

Return to Top
#1089245 - 11/28/08 08:16 PM Re: Gift Card Question mdog76
Elwood P. Dowd Offline
10K Club
Elwood P. Dowd
Joined: Aug 2001
Posts: 21,939
Next to Harvey
"Registration" is a concept that your vendor has coined; i.e. it is not a legal requirement regardless of the dollar amount and has no universally understood meaning.

At $500, a nonreloadable card is a poor money laundering vehicle unless it can be purchased in volume. If you have limits on the number you will sell per person per day, universal "registration" sounds like an excess of caution. In any case, no one is going to be able to show your management that registration is required by anything other than the vendor.
_________________________
In this world you must be oh so smart or oh so pleasant. Well, for years I was smart. I recommend pleasant.

Return to Top
#1090322 - 12/02/08 05:45 PM Re: Gift Card Question mdog76
BrendaC Offline
Power Poster
BrendaC
Joined: Sep 2001
Posts: 6,029
Sweet Home AL
Are you selling the cards as an agent or are you the issuing bank for the cards?

As previously noted, non-reloadable gift cards for $100-$750 (generally with significant fees if not used quickly) represent lower risk for money laundering. They could be compared to the sale of monetary instruments such as money orders. Could you use them? Yes. Would it be easy? No, very cumbersome.

Another factor to keep in mind is your target market for selling the cards. Do you sell only to established customers or to anyone that walks in off of the street? If I buy 2 who cares? If I want 200, now that may be worth recording somewhere.
_________________________
Life without Jesus is like an unsharpened pencil - it has no point.

Return to Top

Moderator:  Andy_Z