Business customer advertises they will give their customers "cash for their gift cards". Anyone seen other businesses do the same? Seems risky when it comes to situations in which debit card breaches to purchase gift cards/stored credit has come in to play.

Where are they getting the cash? Who are they selling the cards too?

Very high risk business.

Never seen this done before but it reeks of money laundering or at the least tax evasion. I guess if the gift card has $20 worth of credit and the company is offering $10 cash for the card then I can see where this may be a more legitimate but odd business.

I'm guessing they pay $10 for a $20 gift card and sell them for $15. Either way it's going to be a very high risk business with many avenues to facilitate fraud and money laundering.

we have a couple of local MSBs in New Orleans that advertise on the radio that they buy unused gift cards...there is a business here if people are willing to put forth time and effort...risky? no doubt. I understand that pay about $.40 on the dollar, so pretty decent margin.

Possibly related but I've seen a number of signs near freeway off-ramps offering to buy diabetic test strips. A couple of years ago, the bank I was at encountered wire fraud involving an order for non-existent diabetic test strips.

Are these things becoming the next black market baby formula scam?

I heard an NPR story earlier this week about diabetic test strips, and how many new companies have formed buying and selling them...apparently they can be very expensive

There is a black (or grey?) market out there for them. And we all know that were there is the potential generate lots of cash, the money launderers and terrorist financers cannot be far behind:

http://www.timesunion.com/local/article/A-test-market-of-a-costly-kind-2794207.php

There is a company here that also purchases gift cards. Apparently they get a small return for the unused plastics.

This is a little late, but thought some of you might be interested in this article on buying gift cards.

Gift Cards

Thanks, Retread. Great article.