Exchanging BTC for paypal vs exchanging for gift cards - legal ramifications?

[coga]

I am running btcbuy.info, where I exchange BTC for gift cards. Lately people started asking me if I could get them prepaid visa cards or paypal $$$. I am sort of worrying about legal issues coming out of this... My theory is: from legal point, BTC is not money, and gift cards are not money. Exchanging one for another is, therefore, barter. Visa cards or paypal are a lot closer to be considered money, so there might come all sorts of regulations and other crap to follow when dealing with those.

Is there anybody here who knows if a) my theory is correct and b) if there is any way to provide folks with abovementioned goods for BTC without stepping into legal dung?

[sergio]

BTC  is a currency for us, however from a legal point of view, since you can not pay taxes with BTC, BTC is just a good.
Your point of view is correct, in regards to laws they are not an exact science as such anything is possible it is best to play it safe.
The other point to consider is that with paypal you open yourself to potential fraud, it is very easy for an scammer to file a charge back, and to play safer with paypal to increase your operational costs since you will need to provide tracking numbers for your own safety.

If you are a huge vendor than paypal is probably ok, but for small vendors it is not secure.
dwolla is probably a good alternative to paypal, time will tell.

[mizike29]

Yeah I would offer DWOLLA, paypal has been working for me so far, but I have seen plenty of people have the chargeback issue.  I helped myself get around that buy providing and actual trackable product to sell for example a red paperclip and 3 free bitcoins.  The product is the paperclip which can be sent and tracked to avoid a paypal charge back or dispute, the virtual currency part was free so that avoids that problem.  Depending on what your selling and offering, I think later down the road the legality part will become an issue, for awhile I dont think there will be any problems trading BTC for paypal funds or any other format legally.