It should be remembered that even the “naked” pyramids also have their own “loophole” rationalization. These schemes, often called “cash gifting
,” claim that they too do not charge “fees” to join and do not pay “rewards” for recruiting, which the anti-pyramid laws specify as pyramid requirements. Therefore, they are also not pyramid schemes either, they claim. They simply facilitate gifts! They are just private clubs where people give and receive. The largest gifting program was called “Women Helping Women
.” More than a million women joined. The scheme claimed everyone could receive an 800% profit on their original gift. Each person who joined made a gift of money and later, as others also made their gifts, the earlier people received gifts from eight others. Wink, wink, nod, nod.
As a side note, experts have determined that the cash gifting schemes, which have no products, actually cause less
economic harm than the MLMs do, which use products as their fig leaf. More participants in the cash gifting schemes actually can make money (nearly 10% versus less than 1% in the product-based schemes and the average losses per person are less.) Yet, product or no product, the results – massive consumer losses – are essentially the same because the essentials of the pyramid are the same. Both types of schemes also carry out the same deceptions about income and sustainability. Both tell the same lie and rely on the same “endless chain” trick.