Gift cards are incredibly popular. They can let someone make a purchase without alerting their spouse, making it easier to arrange for a surprise birthday present. They make convenient and exciting holiday and birthday presents for people of all ages. Even school-aged children can find a way to spend a gift card at their favorite store.
However, there is a dark side to the popularity of gift cards. They can also play a role in money laundering efforts. If your business sells gift cards, especially if they sell prepaid credit card gift cards that consumers can use anywhere, there could potentially be risked for accusations of money laundering.
Businesses may need to limit cash purchases of gift cards
When government agencies investigate organized criminal activity, they have many tools to help them track the flow of money and resources. The use of specific money, including marked or sequential bills, to complete a controlled drug purchase is an example.
When money released in a drug purchase winds up back at a bank, it gives investigators an idea of how the criminal enterprise operates. If you have people who frequently come in to purchase gift cards with cash, they might be using your company as a way to launder money. You could wind up depositing marked money and bringing yourself to the attention of investigators.
Getting identification from those who spend a significant amount on gift cards and limiting cash transactions for the purchase of gift cards can help protect you against unfounded money laundering allegations. Those accused of such an offense may be able to demonstrate that they were not directly involved in the criminal activity but nearly an unwitting tool used by local criminals.
