Bitcoin Forum

An Open Letter To Amazon.com

Regarding cancellation of gift cards I have purchased via Purse.io, and sold on Ebay, given as a gift to my mother, and retained on my Amazon account.

BACKGROUND

On June 2, 2014 I read with interest a news article announcing a service that enabled investors and miners in Bitcoin to purchase items on Amazon.com. (http://www.coindesk.com/purse-io-can-shave-25-bitcoin-buyers-amazon-bills/)

The service, Purse.io, allows users to create wishlists on Amazon which they published to Purse, providing bitcoins that Purse would hold in escrow. People seeking to buy bitcoins would then purchase the items on the Amazon wishlist, having them sent to the wishlist creator. Upon delivery the bitcoins would be released from escrow by Purse.

Many people want to obtain bitcoins but without their own mining rigs or the right know-how and bank accounts linked to bitcoin services after a verification process, they have only risky back-alley means to obtain them. So a service like Purse, which let anyone with a credit card purchase bitcoins from miners like myself at a market premium and with an escrow agent to oversee the transaction, made sense.

I tried the service and found it worked well as described. After several successful transactions I shared my positive experiences with the service on Bitcointalk (https://bitcointalk.org/index.php?topic=601676.msg7741028#msg7741028). Respondents raised the topic of fraud and concerns I could be liable for a bidder making an illicit purchase on my behalf, causing me to contact Purse.io. I posted the response I received from Purse.io on the thread on July 15:

...There are many reasons we chose to integrate with Amazon, and one of them is the fact that they have a state-of-the-art fraud detection system and a strong anti-chargeback process.

Sometimes, Amazon cancels even legitimate orders because it looks suspicious to them (i.e. $1,000 gift card order purchased from Brazil to a Spender in Alabama). People who Buy BTC through our site and try to chargeback Amazon will find their attempts fruitless. Amazon will provide evidence that they shipped and delivered the product and will require a return of the items before they issue a refund to the Buyer. They have great relationships issuing and merchant banks, and they do not outsource payments.

On Purse's side, our system ensures that Spenders aren't exposed to fraud. Spenders' BTC aren't at risk because they have to confirm delivery of the item. We are developing capabilities that detect changes in Amazon orders so that we minimize the wait time for Spenders.

I was reassured by this response, and by the fact that some of my orders on Purse had been delayed or canceled apparently because of Amazon's anti-fraud systems. This indicated to me that they were successfully weeding out potential illicit purchases. In the meantime I was able to purchase items as well as gift cards on Amazon.com via Purse, and use the gift cards without any hassle. I gave one gift card to my mother for her birthday, and even made a sizable purchase of bitcoin myself on Purse using Amazon gift cards when an arbitrage opportunity arose.

EBAY SALE OF GIFT CARDS

In early August I listed two gift cards for sale on Ebay, as by that point I had confidence that I had valid cards to sell and there was no sign of issues with Purse or Amazon. I researched Ebay's policies and followed them carefully, aware of the reports of scammers who would bid on cards, utilize them and then report to Ebay that they hadn't received the cards or they were invalid. Both cards sold and were shipped and received without issue and everything seemed to be fine.

On September 2 I received a message from Ebay informing me that the buyer of the first gift card had opened a dispute and requested a refund. The buyer reported:

Hello, I entered the gift certificate onto my amazon account. Then this morning I got this email from Amazon.com, containing the following: "The gift certificate you recently attempted to redeem is invalid. Please understand that we cannot reissue it or reimburse you for these funds. Any associated orders have been cancelled. We suggest that you contact the party who sold you the gift certificate to inquire further about their policies for dispute resolution."

(In follow-up contact with the buyer, whom I'll call AH, it turns out they were able to deposit the gift card funds to their Amazon account initially and things were fine for about ten days. They even made a small ($7.19) purchase with it, prior to Amazon cancelling the card. So the card was valid, but then Amazon cancelled it.)

MASS CANCELLATION OF GIFT CARDS

I looked up the serial number information I had retained on the gift card in question and logged into Amazon.com to contact Amazon support. That's when I noticed that Amazon had also cancelled all of my own gift card funds on my own account. This included three cards, all purchased (to the best of my recollection) by separate bidders on Purse.io. The cancellations occurred on August 27, with no email or other form of notification to me of the action being taken despite passage of almost a week.

After my initial contacts with Amazon customer service on Sept. 2, Amazon confirmed that the card I sent to AH was redeemed by an account matching the name to whom I shipped the card. They did not respond to my inquiries regarding my own canceled gift cards. On Sept. 3 I received updates from AH via the Ebay message system, as they were separately following up with Amazon:

Hi again, Here is what Amazon said in response. Could you take a look at this message and see if there's anything you can do to resolve it with amazon? Hello, I'm following up on your recent contact to our Customer Service department and I'm very sorry to hear about the trouble you've had trying to use your $200.00 gift card. I've checked our records, and the claim code you received from [REDACTED - call her CC] there appears to be a problem with the purchaser's account and the gift card is indeed not available for use. I regret that for security purposes I'm unable to provide you with any further information. Therefore, I recommend contacting the person who bought the gift card for more information. If they feel this is an error please have them contact us with directly with this matter. For your reference, please visit the following link for the gift certificate fine print: http://www.amazon.com/gc-legal.

I vaguely recalled the ""CC" in the quote above, because each item shipped from Amazon from a wishlist includes a slip of paper noting that it is a gift and gives the name of the person sending it.

From this information it is becoming apparent that something like the following has happened:
1. A "bad actor," either CC or a thief using her identity made the gift card purchase on Amazon, to receive BTC from Purse.
2. Amazon accepts the payment from CC; Amazon and perhaps credit card or other corporate payment systems anti-fraud detection fail.
3. I received the gift card and confirmed delivery to Purse, releasing my escrowed bitcoin.
4. Then I resold the gift card to AH on Ebay, receiving payment via Paypal.
5. Weeks after the purchase in step 1, Amazon identifies it as fraudulent and cancels the gift card. AH has a dead card they've paid for, and I'm caught in the middle having paid for it as well but with my reputation at Ebay on the line.

CLUES FROM PURSE

All this shed light on an exchange of emails I had with Amazon and Purse on August 22-25, after the Ebay sale of the gift cards.  On August 22 I had received a cryptic email from Amazon stating:

The gift certificate you recently attempted to redeem is invalid. Please understand that we cannot reissue it or reimburse you for these funds. Any associated orders have been cancelled.

That was odd because I hadn't attempted to redeem a gift card at that point, and my Amazon account showed nothing amiss with my previous gift cards. Nor had I heard anything from my Ebay buyers as I might expect if they were having problems. So my initial reaction was that someone must have bid on one of my Purse.io wishlists but sent the gift card to themselves. (I knew from my own experience that you can deliberately or accidentally ship a wishlist item to your own address quite easily.) I figured someone shipped themselves a gift card from my wishlist and tried to redeem it (perhaps with an ill-conceived idea of trying to wrest the escrowed bitcoin in Purse from me in a dispute.) So I contacted Purse.

In a response asking for more details, one of the operators of Purse made a remark that I shouldn't buy gift cards using Purse. I asked why (I had noticed a large proportion of Purse listings were for gift cards all summer) and another Purse rep explained that Amazon had a high rate of cancellations for gift card purchases, especially those of higher value. I was beginning to experience that myself at Purse, as multiple listings I had made for gift cards on Purse were seeing their orders canceled by Amazon. The last gift card I received via Purse arrived on August 19. For obvious reasons I've discontinued use of Purse for at least the time being. But Purse never mentioned the risk of gift cards being revoked after shipment or of any other issue to be concerned with in this case.

In any event, Purse did not confirm anything relating to the August 22 email from Amazon, leaving it unexplained. This morning AH provided a screenshot of their gift card account at Amazon, in Ebay's dispute resolution center. It shows that AH deposited the gift card I sold them to their account on August 22 without issue. They then made a purchase with the card's funds on August 28, and then the funds were canceled on Sept. 2. So it's still unclear whether Amazon's email to me on August 22 relates to AH's card or something else entirely. If AH's use of the gift card on Aug. 22 triggered the warning email to me, why was it accepted into AH's account such that they could use it?

CURRENT STATUS

I'm still awaiting a reply from Amazon as to the cancellation of gift cards in my own account. In my responses to AH I've reassured them that regardless of what Amazon does, I believe the right thing to do is to reimburse them myself as the cancellation of the gift card was no fault of their own and they should not held responsible for the actions of another bad actor. I am hopeful that the same logic will apply to myself.

SHOULD INNOCENT PARTIES BE MADE TO PAY FOR OTHERS CRIMES?

As I understand it (not being a lawyer), when a crime is committed, stolen property can be retrieved to be returned to the rightful owner.  To that extent I can understand and appreciate Amazon's actions that they are acting in good faith, perhaps on behalf of a credit card company that suffered a loss due to a stolen credit card.

However, (in this illustration) it was the credit card that was stolen, not the gift card or the bitcoins or the funds in Paypal. An organization like a pawnshop understands the risks of dealing with potential stolen property and builds that risk into their business model and profit margins. But suppose someone stole a credit card, bought a watch with it, pawned the watch, and then the pawnshop sold the watch to Buyer A, who then traded it for a cell phone with Buyer B.

Should the police confiscate the cell phone and give it to the original victim? Or the watch? As innocent parties it seems to me the police would be engaging in a shell game of trading the injustice around if they did that. It is the thief who should pay, not downstream parties.

Otherwise, consider that every dollar bill in our pocket or in our bank account may be (or likely is?) downstream of some illicit activity to which we are entirely innocent. To say law enforcement can confiscate those funds undermines the faith people have in that currency. Does Amazon appreciate how unilateral revokations of gift cards obtained legitimately, as in the case of AH and my mother and I and so on, will undermine the legitimacy of their gift cards?

DOING THE RIGHT THING

After some initial anguish, I decided that regardless how things pan out with Amazon, I would not "spread the injustice around" and stiff my Ebay buyers. If the gift cards remain revoked I will refund AH the amount that Amazon revoked from them myself. This despite the fact that Amazon initially accepted their card, which I believe would give me an excellent case in Ebay's dispute system to fend the case off without a refund. It would be hypocritical of me to do otherwise, as I believe Amazon should treat me and others in a similar situation likewise.

AMAZON CAN LEARN A LESSON FROM MINTPAL AND VERICOIN

One of the cryptocurrencies I am invested in besides bitcoin is Vericoin. On July 13, 2014 the cryptocurrency exchange Mintpal was hacked. 30% of all vericoin in existence were stolen from their vault, with a value at the time of around $2 million dollars. (http://www.coindesk.com/bitcoin-protected-vericoin-stolen-mintpal-wallet-breach/)

A cryptocurrency such as vericoin or bitcoin basically exists in the form of an accounting ledger distributed across the internet. The ledger is broken down into "blocks" containing all the transactions for a given chunk of time. The entire ledger is known as the blockchain, with new blocks being constantly added to record ongoing transaction activity. The fact that you "own" a bitcoin or vericoin is established by its being recorded in the blockchain.

In response to the theft the vericoin development team orchestrated a "rollback." This involved truncating the blockchain back to just prior to the point of theft and then restarting blockchain activity with new blocks lacking the theft transaction. It's as if a band of bank robbers were fleeing down the street with bags full of cash and then - POOF! - the cash magically teleports back into the bank vault, leaving them empty-handed.

Except that it isn't just the bank robbers who lose their haul. At the grocery store a lady walks out with her groceries, but the grocer sees the funds from the debit card she just used, vanish. Money taken from an ATM that morning vanishes from a church offering plate. A wire transfer from the bank to purchase stocks is revoked, leaving the stock broker in the lurch. Not good.

But in the case of vericoin, the original blockchain could still be used as a reference - it records ALL transaction activity. As a result, Mintpal worked with the vericoin team and announced:

We have committed to our customers and to all [other] exchanges that we will cover any losses faced as a result of the rollback.

Mintpal was able to reassure vericoin investors that no one but themselves would be defrauded by the rollback. They took on the burden of the theft themselves rather than trying to escape responsibility for inadequate security. Amazon, take note!

CONCLUSION

In conclusion I request that Amazon reinstate the gift cards I have purchased, including those provided to AH (not to mention my mother, etc.) We are not the guilty party and should not be defrauded, and Amazon is trying to close the barn door weeks after the horse has been stolen in this case. This concerns funds tallying around $950 in my case. Think I will ever touch Amazon.com with a 10-foot pole or speak well of it to others if the cards I bought are canceled?

I would also recommend that they cooperate pro-actively with Purse.io management to improve their anti-fraud methods without defrauding their customer base. For example, a delay could be introduced in the escrow system dependent on triggers from Amazon to confirm when funds used to make a purchase have truly cleared on their side.

I ask that Purse.io take the initiative in working with Amazon on this to protect their own customer base and defeat fraudulent activity, and that they provide some warning to users on their website as to the kinds of problems that users such as myself are encountering. Warning users of the risks will protect themselves in the long run.

POSTSCRYPT: THE BITCOIN ADVANTAGE

I must also point out that this entire situation would likely not exist if Amazon simply followed the lead of thousands of other companies like Dell, Overstock and DISH and began accepting bitcoin directly. Although bitcoin is the target of a good deal of fraudulent scams, the fact that bitcoin transactions are direct between buyers and merchants means the merchant is free of the entanglements and headaches that frauds with traditional 3rd party payment systems like credit cards involve.

Bitcoin frauds target the holder of the bitcoins themselves, so all Amazon would be concerned with is securing its own bitcoin accounts. There
are no issues with chargebacks, counterfeiting, bounced checks, and the like. There is no weeks of delay to confirm a transaction or learn that it was executed fraudulently. (Confirmations take 30-60 minutes with bitcoin, or near instantly using methodology such as is implemented at Bitstamp.) The result would be major cost savings and improved customer satisfaction as well as faster flow of funds to and from Amazon.

RESERVED

UPDATE 4 Sept. 2014 12:17 PM CST - My mother confirms that she was able to utilize the gift card I gave her. That takes one issue off the table.  :)

https://bitcointalk.org/index.php?topic=307922.msg8514411#msg8514411  contains a response from another Purse user who has lost the gift card funds they purchased at Amazon.

UPDATE 15 Sept. 2014 - I had an email from Purse.io management on Friday (9/12) asking for a screenshot of my Amazon gift account which I provided this morning.

Following some false starts, I was able to reach Amazon's live customer service over the phone today and had what appears to be a very constructive phone call. I explained about the use of Purse.io and after a couple minutes on hold for a couple times while they researched things (Purse, the buyer's account, etc.), was able to provide my claim codes and serial numbers for the three cancelled cards in my own account. (I've had to message AH to ask for the claim # of their card, as I only had the serial # from it, and didn't have that available during the call. But Amazon said I could contact them again when I had the information on the 4th card.)

Taking the Amazon rep. at face value, he said that their gift card team would either be reinstating the cards or else provide me with a new claim code that I could use to replace the funds. He said I could expect to hear from them via email in 24-48 hours.

UPDATE 16 Sept. 2014 - Called Amazon back with the claim/serial numbers from AH for the ebay'd gift card. This rep. indicated that both the cards in my account and the ebay'd card were all "still under investigation." But he repeated the feedback from the first rep. that I should be contacted by Amazon soon (presumably tomorrow).

UPDATE 17 Sept. 2014 - Amazon sent an overnight email informing me that:
1. I had 10 revoked cards, not 4. (The funds from the rest had been previously spent). They go back to June 23 (date I entered them to my account). This includes every Purse.IO card I purchased apart from the ones I ebay'd. This is the first time they've bothered to tell me this.
2. They refused to provide any details regarding why the cards were revoked - a "just trust us" response.
3. They pointed me to contacting the original buyer of the cards for further resolution.

Of course I'm trying to work this thru Purse as well, but given the anonymity involved I'm not holding my breath. Amazon makes much of "being the most customer-centric company on earth" in their communications, but this is the exact opposite. They are covering their losses by shifting the losses to 3rd parties (not the thieves), while not informing us for up to 3 months, so that we could continue to make transactions for which we'd lose everything. Gee thanks Amazon. Could you do that any worse? I'll say it again - revoking cards after they've been delivered is like randomly spraying a street with gunfire upon notification that there has been a mugging. You might hit the mugger, but odds are they ducked first and now you're just hitting innocent bystanders.

I've sent the necessary funds back to my Paypal account to pay back AH and will be doing so as soon as they clear. At least I won't be party to Amazon's poor treatment of its customer base.

UPDATE 18 Sept. 2014 - I sent a refund to AH for the amount revoked on their gift card.

UPDATE 28 Oct. 2014 - Following up with Purse, they have reported back that they will be issuing me a refund of ~0.818 BTC; which as near as I can tell is a full refund allowing for the drop in value of BTC since August. So kudos to Purse, and I hope they are able to recoup any losses from fraudulent users.

I don't even know that it's possible use BTC on amazon!!!

You knew that using Purse to get Amazon gift cards was risky, not least because several people, including myself, told you so.
You received a considerable premium for your Bitcoins sold that way. That premium includes the risk of losing your money.
Amazon did not voluntarily involve themselves in your trade, that was between you, your (fraudulent) trading partner, and Purse.

You contacted Purse, not Amazon, and Purse reassured you, not Amazon.
Your grievance is firstly with your trading partner, and secondarily with Purse.
If you had gone to Amazon, explained the situation, and asked them if they would guarantee your gift cards in the event of fraud by your trading partner, what do you think they would have said?

Amazon had no part of that transaction, or any knowledge of it.
Amazon have cancelled the gift cards due to fraud by the person who actually bought them, which is your trading partner, not you, who most likely either used a stolen credit card or performinged a charge-back.
Amazon have now not been paid for the gift cards, why should they continue to redeem them?
They have no way of knowing that you are not working with the fraudulent trading partner, after all.

You didn't purchase any gift cards from Amazon
Your fraudulent trading partner did.
You have no relationship with Amazon other than being the recipient of fraudulently purchased gift cards.

Amazon are not the guilty party either, why should they be defrauded?

You should be directing your complains to Purse, not Amazon.
You chose to make a risky deal with an unknown purchaser for a considerable risk premium, Amazon did not.
Purse were involved in your original transaction, Amazon were not.
Purse reassured you about the risk of your transaction, Amazon did not.
Purse handled the escrowing of your funds, Amazon did not.

Pot, kettle, black.
You knowingly chose to enter into a risky transaction, and ended up losing money,
Now you are trying to escape responsibility for that by expecting Amazon to pay for your loss.

Exactly. You are the pawnshop here. You accepted goods from an unknown source, and they turned out to be fraudulently purchased. You should have built that risk into your business model.

Unfortunately, law, at least in the US does not agree with your sentiment.  For instance, you will sometimes see a story in the news where a stolen car is returned to the owner who reported it stolen decades ago.  Maybe the car is fully restored now or maybe it is mostly destroyed, but the car is returned to the original owner, and the last owner is out the cost of the car and depending on how ambitious the prosecutor in their jurisdiction is, lucky if they aren't jailed for "receiving stolen property."  Usually these cars are caught by customs on the way out of the country, but since it's decades later, the vehicles have probably changed hands a few times.  I'm not sure how the stolen credit card analogy you use would play out, but unfortunately, it would almost certainly involve an innocent party being screwed over if the insurance company were able to track the goods and thought it worthwhile to attempt recovery.

@ebliever What is the point of writing a letter to Amazon in BitcoinTalk ? I think it was better to write it in Amazon forum. At least tweet the link of this post to Amazon's twitter handle.

The goods were from Amazon itself , though I take your point. But when someone places a bid on Purse they have no way to vette the bidders or investigate them, as is true of any auction site (such as Ebay itself). Amazon (and potentially credit card companies, etc.) has its anti-fraud system, so they at least have a chance of stopping fraud in a way that those of us putting our BTC at risk cannot. So I think Amazon is more analogous to the pawnshop than myself in this sense.

I did of course make a rudimentary attempt to assess risk and allow for it. Key to my risk assessment was a strategy of slow growth and trials, and the notion that any frauds would happen one case at a time, with time to react before another transaction with the same scammer if I encountered one. This policy by Amazon eviscerated this strategy, because I was able to make multiple transactions in which everything seemed fine and then Amazon went and canceled the funds retroactively. Please note that they didn't even inform me, leaving me open to the risk of making additional transactions that they could have canceled in the same fashion. Amazon might like such a policy, but it's not very fair to users who think things are OK and keep going deeper until Amazon sucks their account dry. This is really my core complaint - cancelling a product after it has been delivered means they may be no longer hitting the thief but rather other innocent parties. I'm hoping it is just a matter of investigating on their end to confirm and recognize this when it happens.

I've made multiple queries to Amazon now about my canceled gift cards funds and received ZERO response on them. They didn't even have the decency to send an email when the funds were originally cancelled. I'm going to ask them again tonight to at least provide me with a status or roadmap or something if there is an ongoing investigation - I'd be fine with that kind of response, and understand their need to keep sensitive details under wraps. (One factor is that I want to reach closure with my Ebay buyer, AH, in a timely fashion. That is, I don't want to prematurely pay them and then wind up having their card restored, but I don't want to leave them hanging either.)

Still, I wish they'd be more forthcoming because too much does not make sense to me at this point. For example, if I'm right that there could be credit card fraud involved, doesn't that mean the credit card company would be the one that has lost funds, not Amazon? Perhaps someone in the know can explain this - if a credit card company suffered fraud and paid Amazon, would there be agreements between Amazon and the CC company to repay the CC company? Otherwise it looks like Amazon is getting paid in full but still cancelling the gift cards, coming out ahead. But the notion of such agreements strikes me as unlikely - it would mean Amazon would be the one suffering losses from credit card fraud every time physical products were shipped and then Amazon was forced to repay the CC company. Why should Amazon pay for credit card company losses? (They would then be in the same situation I'm protesting being in now, and I think it would be just as unfair for them to be bearing that burden.) So something isn't making sense.

Amazon is selling goods at face value.
You are selling BTC at a 25-30% markup over face value.
I think it is clear who is taking a risk premium?
If Amazon should be accepting all the risk, why are you being paid 25% more than the value of what you are selling?
If something seems too good to be true, it usually is.

In the situation we are assuming, of credit card fraud, the credit card companies have reversed the charges, leaving Amazon out of funds. Amazon have therefore cancelled the gift cards bought with the withdrawn funds, to minimise their own losses.
With physical products, Amazon could not do this, but then with physical products they would also have a delivery address, and more chance to investigate the fraud.

Too long - didn't read.  And neither will Amazon.   :-\

Keep your initial complaint letter short and summarize.  All the details can come out later.

More info on how to write a complaint letter:
http://www.infoplease.com/ipa/A0002121.html   :)

Those guys get thousands emails a day, and I doubt that they even read them in their entirety. The guide Vod posted is really useful and will make the process easier for both parties.  

I like the idea of purse.io, but ultimately what's to stop you being on all sides of the same transaction (i.e. using stolen cards to buy yourself stuff from Amazon and, of course, receiving the escrowed bitcoins to another address)?

purse.io should take the risk, but do you think they will?

You can't directly. Purse.io is a site where you can get people to buy you things from Amazon in exchange for bitcoin, though obviously problems like this happen.

I'm making repeated inquiries to Amazon using their system, and being concise about it. But you can only put so much detail into those miserable little comment boxes they use. So I tried assembling everything here for reference. Not everything can be explained in 25 words or less.

So this is partly a reference in case someone at Amazon does care to dig into it (because they are dealing with similar cases as well and have a bigger problem on their hands), and also because I thought it important to warn Purse users (and BTC investors who might be considering Purse) of what is happening. So far Purse is still not warning anyone at their site that anything is amiss. That's a problem too.

Amazon will be forced to sooner or later, get on their knees and suck on the BTC god, reading this letter or not.

Hence why it's an open letter, from the community to Amazon.

O/T: I don't think this needs to be done, they'll learn their mistakes themselves and probably suffer a decline in business growth as a result.

I have writen to Amazon before about BTC and I got ignored, good luck with that tho.

Got to admit for a complaints letter that is pretty big and may just get pushed to the side by Amazon. I would have definitely kept it more short to be honest and to the point and then asked any further questions or put any further queries forward after that. If you do get a reply from Amazon that is great but I really do not see that happening.

There is nothing to stop someone from doing this. This is the reason why amazon will not reimburse the OP for the stolen gift cards.

I've explained this a couple times, but I have made 4-5 shorter inquiries to Amazon thus far using their customer service contact interface. Due to the complexity of this case and the need to warn others at risk I thought it best to document everything I knew publicly here. I don't expect a reply from Amazon on this forum directly; rather, I will provide any update from Amazon or Purse on this case myself.

Amazon boasts of 12 hour replies in their contacts page; 32 hours after my latest submission I received an odd automated email from them. It says something about not being a member of their Advantage program (?) and to resubmit using the standard Contact Us form, which is exactly the form I used. Once I dig up the physical cards I have I'm going to have to try calling them.

That's true, and that's why I didn't expect Amazon to instantly reinstate the cards without an investigation. Posting the details as I know them (and being willing to answer any other questions that come up to the best of my ability, probably with assistance from Purse) was done precisely to help an investigation determine that I'm not playing both sides of the fence here.

What are they suppose to investigate? It doesn't matter if you are on both sides of the "fence", the fact of the matter is that gift cards were purchased and Amazon did not receive payment. As a result they canceled the gift cards. I cannot imagine anyone even hoping for any different of a result.

If the gift cards did not work despite paying for them via purse then you should bring up this issue with purse.

What you are doing is nothing more then extorsion to amazon. Amazon is not a party to the subject dispute. Inputs.io is. They resulted in the fact that amazon is having to reimburse a cardholder that did not pay in exchange for nothing.

What is inputs.io?

Is the Ebay buyer also guilty of extortion against me for asking for a refund? I am a bit surprised at the negativity of many people here. I'd have thought that with scamming being so widespread in crypto people would have more sympathy for victims, rather than calling them extortionists, etc. for asking for a refund. I guess not.

Keep in mind that Amazon has not actually told me what the issue is that has led to revocation of my own gift cards. I don't know if they have actual bad charge(s), or were cancelling en masse due to one bad charge, or what. This is still very much an open investigation, at least for me. How comfortable are you with the idea of a company unliaterally revoking gift cards you've paid for, without warning and without even the bother of notifying you? And then refusing to tell you why despite repeated inquiries? Does that seem right? I don't mean to sound distrustful, much less paranoid, but companies can make mistakes, not to mention outright corruption, and if there is no accountability things will tend to get worse.

Again, you didn't pay for them.
You anonymous counterpart did, and then transferred them to you.
As I understand it, the following transactions occurred:
You transferred BTC to AnonBuyer.
AnonBuyer purchased a gift card from Amazon.
AnonBuyer transferred that card to you.
Amazon probably can't tell you anything about whether a credit card was stolen, or whether a chargeback took place, because it wasn't your card, and you weren't their customer.

Toleng should have said purse, which acted as escrow to the transaction.

What you are not understanding is that the purchase and sale of gift cards is not something that is risk free. This is why they trade at a discount to their face value. If you are getting a 30% discount on a gift card then you should assume that there is roughly a 30% chance the gift card will ultimately have no value by the time you are able to spend the amount loaded on it.   

The other party to the transaction is actually purse, not inputs lol. Other then that you are 100% correct. If the gift cards were fraudulently purchased and amazon did not receive any money from the sale of the gift card then they would have no reason to give the gift cards any value. 

If Amazon accept bitcoin directly, there will much less hassle.

I knew what happened here.

After reading the first sentence.

This is exactly correct. (except for the inputs part). The OP is trying to use social media to extort amazon because his investment went bad. The OP should have known that he should have diversified his sources of gift cards and that he should have only traded with more established traders

I think this was asked above, but I don't see that you have answered it....what do you think amazon is going to investigate? From the looks of it (based on your very long story), they did not receive money for the gift cards (they did but the money was taken from them when the credit card used was likely reported either stolen or had a charge back filed.

If you are wanting amazon to give you gift cards with value when they did not receive payment then you might as well be asking amazon for a check in exchange for nothing

I've updated the first post below the OP with the results of my contacts with Amazon (and Purse so far as that's gone). In a nutshell, Amazon NOW tells me they revoked every gift card I purchased through Purse, but won't tell me why or when or any details about the revocation. So (despite the screwy claims that the victim is committing "extortion" here) I'm out 100%, including the refund(s) I'll be providing on Ebay because I won't stoop to treating people the way Amazon has treated me.

Please note that Amazon has only just today reported revoking cards going back to June 23. When did they decide this? Why don't they bother notifying customers when they are revoking gift cards? My first couple gift cards to test the waters were $50 each. If they'd acted and notified me in a timely manner it would have provided red flags that would have stopped me from making purchases of hundreds of dollars more in gift cards. Moreover I (and others in the same boat) could have warned one another and the public in forums like this (not to mention Purse itself), preventing many thousands of dollars in other gift card purchases that Amazon is no doubt revoking. (As can easily be inferred now from the scale of Purses' listings the last few months.)

Instead everything went smoothly with zero trouble for three months, enabling the problem to snowball. And Amazon can just unilaterally revoke it's own gift card funds and absolve itself of responsibility, while everyone on the BTC-selling side at Purse.io is left holding the bag. Amazon's secrecy and refusal to notify customers took what could have been contained as a small-scale problem and now my best guess is it is several orders of magnitude bigger.

And while I'm not one of those who bash corporations as sinister or evil, I also don't regard them as automatic saints - they are filled with sinners like the rest of us. So how do those of us licking our wounds know that Amazon is only terminating gift cards for which it has specific evidence of fraud? I know for a fact that I used Purse to make a BTC purchase, so not every transaction there was fraudulent.  So Amazon's report today that they revoked 100% of my cards raises the question - were Purse transactions really so overwhelmingly fraudulent, or is Amazon just punitively or avariciously canceling any and every gift card it thinks it can get away with, whether they've been paid or not? With Amazon behaving as a black box it's impossible to say.

Because (again), you didn't purchase them from Amazon, someone else did. They won't give you details about someone else's transactions.


Almost certainly.
It is a setup perfectly designed to launder stolen money, converting it into anonymous BTC.
That is why you are being paid a 25-30% markup, to help them launder the money.
As you were warned by several people.


I'm going to be pretty comfortable guessing that it isn't this one.
Amazon have been pulled into a laundering scheme against their wishes.
They are out the value of anything bought that they haven't managed to cancel.
The real owners of the credit cards are going to see lots of fraudulent Amazon transactions, and it will lower their opinion of Amazon.

They likely have notified the person who purchased the gift cards. More likely then not the gift cards were purchased with a stolen credit card.
The likely reason is that the person you bought from likely bought the first few gift cards in a legit fashion in order to gain trust, either with or or the purse community. Another possible reason is that the account holder of the credit card did not report the what was likely a fraudulent transaction until some time later. Until the transaction was reported as fraud by the card holder amazon would have no way of knowing they were not going to receive the funds from the credit card company
The cards were revoked because payment for the cards was reversed. If you had purchased gift cards from amazon with a check and the check were to bounce would you expect amazon to keep the balance on the gift cards you purchased? If you say yes, then you are unreasonable, if you say no then how is this any different? It is not, only that it took longer for the payment to "bounce"
You implied that all the gift cards were purchased from the same person. That person likely purchased 100% of the gift cards sold to you with a stolen credit card.

The question is not about fraud, the question is if amazon received payment for the gift cards in question

I don't think I implied that; on the contrary I have stated that each of the gift cards came with a slip of paper giving the name of the purchaser; every time it's been a different person.

Of course it's conceivable that one person is creating many accounts on Amazon and Purse to buy the cards. Conceivable, but not parsimonious. I understand it takes time for credit card fraud to show up, but it should not have taken 3 months. And we're still just assuming card fraud - Amazon won't say anything.

I understand it's easy enough for folks to second-guess, especially in hindsight. Keep in mind that when the question of risk came up originally it was raised as a possibility, not proven as the sole possibility. The coindesk article did a good job of portraying Purse as a service for casual investors seeking some bitcoin to buy in without the bother or difficulty of getting bank accounts and doing verification steps, etc. Given the general slide in BTC pricing it was easy for me to imagine people remembering a price of $700 for bitcoin a week earlier, seeing a listing for bitcoin at $750 on Purse (marked up from $600 it had slid to in the interim), and making a legit purchase. My point is simply that fraud was raised as a possibility, not proved as the only source of Purse transactions.

I took what steps I could to mitigate this risk, with the gradual buildup in time being a key step. That's my concern over Amazon's slow response and non-notifications when it did act. I guess I just should have taken it slower.

The one other time I've suffered a significant theft loss was a few years ago when I sold a 30' camping trailer to a young man in the construction industry. He paid $4,000 of the $10,000 purchase price up front, but then after a couple monthly payments he vanished leaving me out $5,000. My attempts to trace his nomadic path were fruitless. (Closest I came was talking to a former landlady who told me "If you find him, let me know. I am trying to serve papers to him myself for property damage!") I still have title to the trailer, so it's conceivable that at some point he'll sell it, and then the subsequent purchaser will discover I have the title. Would it be fair to him at that point to demand an extra $5,000 or I'm confiscating the property he paid for?

Several posters here seem to suggest I'd have that legal right, but it doesn't sit right with me at all. Emotionally I wrote off the loss a long time ago. Unless I found evidence the buyer was conspiring with some knowledge to take advantage of the situation I'd not burden them with any ugly surprises.

At any rate, I see my funds have cleared in paypal this morning. I'm refunding AH because it looks like Amazon's a dead end. And Tigerdirect and NewEgg will be seeing more business from me in the future (especially the former given they accept BTC.) It's not a revenge thing - it's more a visceral fear/distrust thing. How can I ever trust Amazon given how they handled this?

How else do you think they would have handled it? Serious question.
On the assumption we are all making so far:
Someone has tried to launder stolen money through them, buying cash equivalents with stolen credit cards.
Unless they think the scammers are sending random people gift cards out of the goodness of their hearts, they much assume that there is some relationship between the scammer and the recipient. (As indeed there was).
Amazon are out the purchase price. They have the ability to 'recall' the goods purchased with the stolen cards.
You think they should just shrug, and accept being scammed out of thousand of dollars, and the value being sent to people they have a reasonable cause to suspect is working with the scammer?
You knew you were entering into a risky transaction, and were paid a premium for this. They didn't.
Amazon have not reneged on any transaction with you, because you never entered into a transaction with them. You keep ignoring this, but it is a basic fact. Your transaction was with the scammer, their transaction was with Amazon. Your only relationship with Amazon is being the recipient of fraudulent obtained goods. What obligations do they owe you?
Your complain is against the scammer, not Amazon, who were used as a patsy by you and the scammer.

The result you seem to want is that the scammer gets their BTC, you get your cash + 25% profit, and Amazon pays for everything. How do you think that is fair?

Here is one of my posts to you from month ago:

Seems like Amazon did get fed up of being drawn into this scam, and have cancelled orders.

It doesn't sit right with me at all, either.  It is how things work, though.  There was an article on the front page of Yahoo! again today about someone getting a car back that was stolen years ago.  The car was captured by customs on the way out to the Netherlands, and the buyer in the Netherlands is certainly out the funds spent to buy the car.  What really bothers me about this kind of situation is that, at least in the US, "receiving stolen property" is against the law, and I'm afraid there are plenty of innocent people being punished for that crime simply because they made the mistake of trusting a scammer/thief.  To that end, sadly, you should be thankful that Amazon doesn't do something so unthinkable as to press charges against recipients of gift cards purchased with stolen credit cards.

NewEgg accepts BTC as well...  At least in the US and Canada.

From the looks of it, you are not even a customer of amazon. You bought gift cards from purse, therefore you are a customer of purse, and you sold them on ebay, therefore you are a vendor on ebay. I do not see your involvement with amazon.

If you were to use newegg then you would not be able to engage in risky arbitrage as you did in this situation

amazon implementing = BTC going to 50$

If amazon does not keep the BTC, the price could drop. If amazon pay staff salary with BTC, the price will rise.

I would say that the OP is simply trying to engage in a smear campaign against amazon to try to force them to give him money (via gift cards) in exchange for nothing. He is hoping that their PR department will write off the funds from the gift cards as a loss. I personally consider this kind of behavior as fraudulent

Try $500

I think this is exactly why people should do a better job to make sure the person you are buying something from is actually the legal owner of the property you are buying. This is not something the OP did, not is it something that the buyer of the car did in your article. Although it would have been easier for the person in your yahoo article to verify the chain of title the OP could have easily (and should have) asked for some kind of documentation that the gift cards were purchased legitimately and when the balances were zeroed out he could give such evidence to amazon to get them to restore the balances

Amazon is refusing to restore the balances despite my attempts to provide such evidence. They don't care. They won't even provide an explanation for their revokation of the gift cards, despite it being my account that is the one affected.

I'm not going to sue (amount too modest, would just make lawyers rich and goes against my grain), but suppose someone in this situation wanted to sue - they'd be launching a suit completely in the dark. It would require substantial discovery/investigation prying the details out of Amazon as to what is even going on. Only the lawyers would benefit.

Hopefully Amazon has good reason(s) for taking the actions they have done. Hopefully what they are doing is legal and involves a specific, correct decision for each separate gift card. Hopefully not too many other innocent people are getting ripped off (a purpose of this thread). And I hope that anyone else in a similar situation either avoids Amazon in the future (I'll be looking into shutting down my ~17 year old account with them shortly), or won't suffer further collateral damage from future decisions Amazon makes regarding their account.

These two paragraphs contradict each-other. Your first statement implies that you have evidence the gift cards were purchased via legitimate means (you do not), meaning not by a stolen credit card. Your second statement admits that you do not know one way or another if the gift cards were legitimately purchased or not.

Even if only a certain number of your gift cards were purchased with credit cards reported to be stolen, it does not mean they should not revoke all of the balances on all of your gift cards. Say for example you loaded balances from 25 gift cards onto your account and all 25 were purchased with different credit cards. This alone is very suspicious. Lets say that out of those 25 gift cards, 20 were purchased with credit cards that were reported stolen and the purchase of the gift card was reported as unauthorized. (you should remember that a card holder may not realize right away when their credit card is stolen and may not notice unauthorized transactions on their account until a long time after the charge shows up to their account - they have 60 days from the date of their statement to report a mistake on their account). Do you think it would be wise to revoke the other 5 gift cards as an abundance of caution, and refund the payment method used to pay for the gift cards? I would certainly say this would be a good business decision (and an ethical one).

My apologies for the lack of clarity, but you've misunderstood me. I was referring to my own payment for the cards in the first sentence. But in your second paragraph, you seem to be saying that a legitimate purchaser of cards (via 3rd party) should have all their funds revoked if some of the cards are not legit. Do you have any idea how outrageous that sounds to a victim like myself? Do you understand that saying you'd refund the payment method used to pay for the cards for the legit cards, that means the purchasers on Purse get their money back, but not I who paid them in bitcoin? So then they get a nice windfall, but I'm shafted by Amazon yet further for legit cards that I purchased! How is victimizing me further supposed to improve the situation? That's not ethical, and would be an outrageous and offensive decision.

I am saying that if 80% of gift cards were purchased with cards that were reported stolen then the chances are the other 20% of gift cards were stolen as well (but have yet to be reported). From a risk management side, if there are a lot of gift cards purchased with different credit cards, there is a very big risk that they were all stolen.

I am not saying that if the cards were purchased via legit means (originally - how your purchased them does not matter) then the value should be revoked. I am saying that if there is a good chance the card was not purchased by legit means (from amazon) then the value should be revoked.

Amazon gift cards are not designed to be traded in this fashion. There are some gift card retailers that likely earn a few percent "commission" from selling their gift cards, however amazon never intended for their gift cards to be used as a currency.

This is a very valid point, actually.  Long before purse existed, when people were selling Amazon gift cards and shopping services on bitmit, I chatted with Amazon support about this, because I was concerned something like this could happen, and Amazon talked me out of even considering it as an option.  They may have even recommended against paying a third party to send a gift via Amazon, and definitely couldn't (or wouldn't) provide confirmation on how such a scenario would be dealt with if the order of the gift was determined to be fraudulent after delivery.

ETA: IOW, the best way to avoid this would have been to talk to Amazon about it (not about BTC, just about buying gift cards if they turned out to be fraudulently obtained) instead of "testing the waters" yourself, which required relying on some assumptions that turned out to be wong.  Unfortunately, in that regard, what you have here is a very expensive lesson.

True. I did actually talk to Amazon a time or two in the July timeframe relating to a specific transaction or two, but didn't plainly ask them about the whole subject. If I were Amazon I would have this in their Gift Card FAQs warning about risks of 3rd-party gift card sales and outlining what can happen (such as in this case).

I still don't understand. We're in agreement on your first sentence in the quote above, but then in your second sentence I perceive a contradiction because your threshhold for revoking a card is "a good chance" (i.e., less then 100%). That means that some percentage of the time a cards funds would be revoked despite being legitimately purchased, due to a premature judgment on Amazon's part.

All I'm saying is that a revocation should be based on specific evidence for each specific transaction. What I think might make more sense (and perhaps fit what you have in mind) would be a temporary hold on an account with a given level of suspicious/confirmed fraudulent activity, until things can be sorted out for each card. I'd be fine with that, pending the outcome of further investigation. But it doesn't look like that's how Amazon operates.

I did the same thing on purse. Today I got an E-Mail from Amazon,saying  that a gift card i used is invalid, but there was no invalid gift card in my account. So, I wrote them a Request, what there E-Mail is supposed to mean. They just answered, they made an error sending that mail and I don't have to do anything further.
I send them another E-Mail, if any of the gift cards I got via wishlist are invalid. They told me they are sorry for being not specific at first, but the gift card can not be redeemed because there are abnormalities and they can not give me any data about the purchaser. so, basically telling me the opposite of what they said in the first place and still not giving any specific information(what gift card they are talking about)
So, I wrote a third request, telling them, they should tell me which gift cards are invalid(Code and OrderID).

So far, Amazon Customer Support sucks ass.

http://www.amazon.com/gp/help/customer/display.html?nodeId=3122091

By reselling your gifts cards on eBay, you have violated the terms and conditions.

Customer Service phoned me. They told me, all my gift cards are valid and the E-Mails(2 out of 3) were wrong. They said, they wrote a lot of wrong E-Mails recently.
They also told me, I can not see, if a gift card is valid, before I redeem it, which sucks, since I planned to get rid of my gift cards over the next couple of months and not that early. That would mean, I have to redeem them all to be sure, none of them gets invalid over time and can not give them to other people.

Can someone please tell me what is the purpose of writing Open Letter to Amazon in Bitcointalk ? Should not it go under Amazon's forum ?

I don't know about US-Law, but I am pretty sure, that they can not forbid you from reselling gift cards in the EU.

could you please tell me, why you don't read the whole thread before commenting on it? OP already answered that.

Salaries in BTC is what we need precisely for BTC not to crash. But do you realistically see them or anyone paying salaries in BTC? and people accepting salaries in BTC, when the price is volatile as fuck? Im not sure about this just yet.

I don't think your interpretation is accurate here. I've reviewed those terms and taken note of them, and in all my conversations and emails with Amazon it's never come up that gift cards can't or shouldn't be resold. You've ignored the "except to the extent required by law" which I believe covers that.

I've read enough threads here and elsewhere on the subject of selling Amazon gift cards that I'm reasonably certain that someone somewhere would have made this same point many times over if it were valid. Come to think of it, Ebay itself has all kinds of warnings and restrictions on gift cards, so it's pretty obvious that they'd ban the resale of Amazon gift cards if your claim was correct.

If I were you I'd use them pronto. This is troubling news and suggests they are having trouble ID'ing legit and suspicious cards and are acting erratically as a result, not just internally but in their customer communications. Not good. It goes back to what I was saying about not being able to trust them any more.

How hard could it really be for them to enable a feature that lets people check a gift card's balance without adding it to their account? People have been asking for that all over, I've noticed, and I don't see what the downside could be.

I know, I will redeem all of them and use them, but I have about € 1.500 in gift cards. That will take time.

It's obvious, why they don't give that option. They just want to make selling them less comfortable, since they can't really forbid it

The extent as required by law means that the law explicitly says it is okay to sell your gift cards (or more commonly to transfer their value to someone else). The lack of a law forbidding it would not cover this.

To the extent required by law

I think Amazon is not going to adopt bitcoin in the close time
there is no evidence or good words about bitcoin in any of his important people

Is there any comment from any of the amazon directives about bitcoin?

I don't think they will actively try to stop the trading of gift cards but will certainly not support either buyers nor sellers of gift cards in the event of a dispute.

However in clear instances of you buying gift cards they do have a legit reason to void the balances of all your gift cards when several are loaded to your account that were purchased with stolen credit cards

No, there doesn't have to be an explicit law about gift cards. There also is not a law, that forbids you explicitly from stealing a car, but a law, that forbids you from stealing stuff.
It's in your right to resell your stuff. The only thing, Amazon really could do, is to bind a gift card to a buyer, which they won't do, since gift cards are meant as gifts.

Has not seen any actions by Amazon

I guess they are waiting for coinbase to wake up.

So, essentially, someone used a stolen credit card to buy an amazon gift card, which they then traded to you for bitcoins? And once amazon learned that they weren't being paid for the gift card I question, they should continue to honor it?

Sorry, but no. Amazon shouldn't have to take the loss simply because you bought fraudently obtained gift cards via bitcoin. That you didn't know they were fraudulently obtained doesn't make a difference or mean that they should have to make you whole.

What it comes down to is that you should never sell an item that can not be taken back (a bitcoin) for something that can be reversed (a credit card payment, gift card, etc)

That's been discussed in great detail many a time on this forum and plenty of other places too.

You tried to do an end run around that, and in doing tow, expected amazon to assume the liability that should have been on your shoulders in the first place. Would you have sold your bitcoins to someone for a direct credit card payment (say, with a square credit card reader)? Would you have sold them to someone who would only pay via paypal? Likely no to both of those, since you could have done so rather than using purse.

Sorry you lost your coins, but you can't expect amazon to let you Spend money on a gift card that they haven't been paid for. That you resold the card doesn't doesn't matter to the  either.

Yes there does need to be a law that specifically allows the sale of gift cards (or something broad enough to cover gift cards). Using your example, the reason it is illegal to steal a car is because there is a law, grand theft auto (this is what it is called in many states), that forbids stealing cars. There is a law against stealing goods, larceny (this is what this is called in many states and the crime is generally different then stealing a car). Conversely there are some states that have passed laws that make it illegal for a company to prohibit the transfer of value of their gift cards, essentially making it a requirement by law that a gift card can be sold/transferred

I am not sure about that, but doesn't the credit card or the owner of the credit card lose money?
If someone steals your credit card and pays for stuff with it, it is either covered by the credit card insurance or the owner of it has to pay. I don't think, that the credit card company just reverses the transaction. In this case the vendor would lose money, who is least responsible.
I thought this insurance is one of the reasons for the high credit card fees.

The card holder is only responsible for a nominal amount ($50 however most banks waive this) if their card is stolen. It is not the bank's fault if a merchant is lax about people being able to use credits cards anon (encouraging the use of stolen credit cards) and is the responsibility of the merchant to have procedures in place that prevent people from using a stolen card, and when someone does use the stolen card to be able to identify the person using the stolen card

Is that really a legal description?
If it is, every online vendor shouldn't accept credit cards at all without personally taking a stool sample.

If they didn't accept credit cards, they would lose custom to those stores that did accept them.
Each store has to balance their own risk profile against the lost custom.

A somewhat happy ending; I've updated response #1 below the OP with this news:

UPDATE 28 Oct. 2014 - Following up with Purse, they have reported back that they will be issuing me a refund of ~0.818 BTC; which as near as I can tell is a full refund allowing for the drop in value of BTC since August. So kudos to Purse, and I hope they are able to recoup any losses from fraudulent users.

Others in a similar situation have also reported compensation from Purse, so Purse deserves some plaudits. I just hope Amazon is not effectively shortchanging them.

I am very surprised they were able to give you a refund as I would think this would be near impossible to prove. If they are giving out refunds for these kinds of things then they will likely go bankrupt very quickly.

I do agree however that you were dealing with the wrong entity (amazon) as they were not a party to your transaction