Attorney Shao Shiwei | Is the Business of Purchasing Gift Cards on Behalf of Others Permissible? — A Case Study on International Students Suspected of Illegal Business Operations

Is the Business of Purchasing Gift Cards on Behalf of Others Permissible?

During the consultation, Xiao Li mentioned that he had previously encountered negative news regarding gift cards and was concerned that this might be an illegal business. However, based on his common sense, he viewed it as an ordinary business with relatively easy profits. If the risks were within his acceptable range, he still wished to proceed.

In fact, news reports have frequently covered cases involving the purchase of gift cards on behalf of others. As early as 2024, the Shanghai Economic Crime Investigation Department published the first case involving illegal foreign exchange conversion using internationally accepted gift cards.

Real Case: International Student Arrested for Purchasing Overseas Gift Cards on Behalf of Others

Media outlets have reported news similar to Xiao Li's situation: Xiao Zhao was arrested in the United States for purchasing overseas gifts on behalf of others.

According to reports, although Xiao Zhao came from a well-off family, his actual overseas expenses far exceeded expectations, with costs for food and clothing. He saw a post in an international student group from someone claiming to be a "senior student" at the same university, who stated that overseas gift cards could be purchased at low prices in RMB, with exchange rates more favorable than banks, and higher discounts for larger purchases. Xiao Zhao, adopting a trial-and-error approach, found that this indeed solved his urgent financial needs. His family in China transferred RMB to him, which he then paid to this "senior student." In return, he received gift card account numbers and passwords, which he used to top up balances on overseas platforms such as Amazon and Steam, using the balance for consumption instead of credit card payments and repayments. After several transactions, he gradually became accustomed to this method.

Later, he introduced this method to his classmates. Finding the process cumbersome, his classmates asked him to purchase gift cards on their behalf, for which he charged a "service fee." In his view, this was similar to running errands or purchasing cosmetics for others. Two months later, his online payment accounts and associated bank cards were suddenly frozen, and he was detained by the police immediately upon returning to China.

Why Were the Accounts Frozen, and How Do Police View the Involved Transaction Records?

Being arrested for buying and selling gift cards is actually due to triggeringbank risk control and anti-money laundering systems.。

Taking Xiao Zhao as an example, his transaction records in the risk control system likely appeared as follows:

• Frequently receiving transfers from many different individuals within a short period;

• Transfer remarks often containing terms such as "gift card," "purchase on behalf," and "top-up";

• Received funds being quickly consolidated and transferred out to one or two individuals (so-called "upstream suppliers") or overseas accounts;

• Correspondence between these upstream accounts and overseas income/expenditure.

When the bank's risk control system monitored Xiao Zhao's account, it automatically issued a warning, alerting the economic crime investigation department to focus attention. Subsequently, investigators would retrieve his bank statements, payment records, and chat logs to conduct a penetrative analysis, gradually reconstructing the flow of funds.

From publicly available typical cases:

One involved pattern is using gift cards as tools for foreign exchange conversion through "arbitrage," where gift cards serve merely as a means of exchange. In a case handled by the Baoshan Court in Shanghai [Case No.: (2025) Hu 0113 Xing Chu 185], a money-changing gang solicited clients with foreign exchange needs via platforms like Telegram and WhatsApp. They first used foreign currency to centrally purchase internationally accepted gift cards, then sold these cards to buyers through various channels, collecting RMB, which was flowed back to clients needing foreign exchange. The court determined that this gang constituted the crime of illegal business operations.

(Image source: Diagram created by Shanghai Police in this case)

The second involved pattern treats gift cards as commodities, not just tools. The involved gang bought low and sold high to earn price differentials plus exchange rate differences. According to a case released by the Henan Procuratorate, Zhou and others extensively acquired international gift cards held by foreigners (mainly Nigerians). They first purchased cards from Nigerians at prices below the local exchange rate using Naira (Nigeria's legal tender), and then sold them in bulk domestically at discounted prices below the USD exchange rate.

This earned both theprice differentialbetween the purchase and sale of gift cards, and theexchange rate differentialbetween Naira and USD. By treating gift cards as special commodities for cross-currency arbitrage through buying low and selling high, judicial authorities ultimately characterized this as disguised foreign exchange trading.

Where Do the Risks Lie in Purchasing Gift Cards on Behalf of Others?

Combining similar cases handled by Attorney Shao, purchasing overseas gift cards on behalf of others is not automatically characterized as the crime of illegal business operations. The key determinant of risk level is the position of this behavior within the overall fund flow: whether it is for personal consumption,occasional assistance in exchanging money, or long-term, continuous profit-making through currency exchange.。

Analyzing the above common scenarios clarifies the differences in risk:。

1. Purely Personal Use: Lower Risk

If you or your family have legitimate sources of foreign currency overseas (e.g., overseas income, compliantly remitted funds), and use these funds to purchase gift cards on platforms like Amazon and Steam, anduse them solely for personal consumption,the likelihood of being detained for investigation by public security organs is low.

In practice, there are indeed instances of being flagged by bank risk controls or questioned by public security organs, mostly concentrated in scenarios where the fund path is unclear.

Once questioned, you must provide a statement locally. The core issues to clarify are the source and purpose of funds. If these can be clearly explained, there is a high probability of preventing the matter from escalating into a criminal investigation.

2. Occasional, Sporadic Assistance Without Charging Fees: Moderate Risk

More commonly, purchasing gift cards for acquaintances is essentially a sporadic, non-business activity. The funds are basically provided by the other party, and you do not earn a price differential, perhaps only receiving a meal or small gifts in return.

However, if several large transfers occur within a short period, or if the transaction structure does not resemble normal consumption, it may trigger the bank's risk control system.

Whether public security organs initiate a criminal investigation subsequently often depends on whether you can clearly explain to investigators that the behavior was not for profit and lacked continuity.

3. Purchasing on Behalf of Others + Earning Price Differentials: Higher Risk

Once the behavior shifts from "helping out" to "providing services to unspecified objects on a long-term, repeated basis," its nature changes, becoming high-risk.

Police will no longer view the actor as an ordinary consumer; related behaviors are easily examined from the perspective of underground foreign exchange chains. Whether a case is filed and how it is ultimately characterized depends on the overall scale of funds, transaction frequency, and the role played within the chain. As long as the involved amount and illegal gains reach certain thresholds, and the business is operated continuously over a long period, filing a case is a foreseeable outcome.

At this stage, from the perspective of criminal defense work, the goal is to strive for a relatively lighter handling result during the conviction and sentencing phase.

First, distinguish between the total transaction volume calculated by investigators and the actual involved amount, excluding legitimate income through the chain of evidence;

Second, clarify to the judge the specific position of the client within the chain, proving that they were not the leader.

Conclusion

If you are considering "starting a gift card side hustle," Attorney Shao advises prudent evaluation when a matter is packaged as a low-threshold, quick-profit side job, because windfalls do not fall from the sky.

Furthermore, when a matter transitions from pure consumption to business operations, many issues cannot be judged by life experience alone.

If account abnormalities or police inquiries have already occurred, rather than anxiety, it is more important to clearly outline core issues such as fund paths, transaction purposes, and behavioral frequency to the police before considering next steps.