What is cash gifting?

As far as I can tell, this is how most of them work: One individual scammer pretends to be part of a large, successful, non-scam "Cash Gifting Network". They vaguely describe great their system is, and encourage victims to send them money as a gift to join. They make sure to explain that there is no direct payoff to the gift, but that by joining the network the victim will be able to make tons of money. Once a victim sends them a gift, they tell the victim to ask other people for gifts. If the victim complains that they didn't get what they were promised, the scammer notes that the victim gave the money as a gift, and therefore have no legal recourse.

http://www.nbc10.com/news/9180219/detail.html story about it that describes it as a pyramid scheme as you suspect.

When I google it, I see only asshat promoters of it. http://www.google.com/search?&q=%22gifting%20schemes%22 :-)?

I'm not entirely sure, but here in the Caribbean, something seemingly similar happens. A group gets together and agrees to take part in this savings/winning scheme, lets assume they get fifty people to participate. They sign something that seems to enforce the ongoing participation. Every week, everyone puts in a fixed amount of money to the pot, a random prize draw is taken and that pot goes to one person in the group. Every week someone else wins (you can't win twice). Also, each week, the person in charge of the money usually gets some tip money from each of the participants for chasing people up etc. This goes on until everyone has won. I have little idea why they do this, because you gain nothing in the long-term (you're out whatever your tip amount is times twelve). But it seems, some people find it a good way to get a lump sum of money to buy something big, rather then spending that pot amount on something smaller each month. Some of the banks make it difficult to even open a savings account, but from my experience, most people who participate have got bank accounts. Shrug.

What Static Vagabond is describing is a bit different; those entities are called Rotating Savings and Credit Associations (http://www.gdrc.org/icm/suppliers/rosca.html). The "gifting" groups are just scams. I encountered one dressed up as "women helping women", but in the end anything like that is just a pyramid scheme that inevitably leads to a few lucky (and dishonest) individuals getting a big payday at the expense of others.

It sounds like some of these scams could also fall under the heading of http://www.sec.gov/investor/pubs/affinity.htm.