Bits about Money's issue for today is about gift cards. Not to dampen the holiday spirit, but people are often abused using them. This is a result of intentional tradeoffs in a complex system.

One reason there is *so little* abuse of the financial system, only tens of billions of dollars worth, is that society chooses to sign up large, sophisticated organizations to be responsible for policing, defanging, and reimbursing abuse. Some of the time.

That choice has a cost, as BAM has explored in writing about AML, KYC, debanking, and other issues.

While gift cards are a staple stocking stuffer for many in the middle class, a very material use case for them is operating as an infrastructure layer for people who are largely unbanked/underbanked, in part due directly to banks complying with AML/KYC/etc requirements.

The "real customers" of gift cards, at large retailers and the financial services ecosystem that supported them, argued (legitimately) that bringing them into KYC/AML/etc scope would negatively impact innovation in payments and serving customers at socioeconomic margins.

That argument prevailed. It *also* has a cost. One user persona, frequently existing in and preying upon those at the socioeconomic margins, is a scammer. And oh boy, do they love their gift cards. (And everywhere else that gets a regulatory carveout, like e.g. crypto.)

This is immensely frustrating for consumers and their advocates when consumers are defrauded using gift cards as a rail, and many powerful and deep pocketed institutions that one assumes are directly involved refuse to help. This is not 100% explained by malice.