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Friday
Jan242014

In China, digital gift cards thrive as new bribes

While China’s discipline watchdog celebrates its 2013 achievements, President Xi Jinping’s austerity drive continues to face challenges.

Bribe-givers and corrupt officials are now using digital technology and loopholes in online gift-giving laws to dodge the authorities.

As the Chinese New Year holiday approaches, digital gifts cards are becoming popular on e-shopping sites such as Jingdong Mall and Taobao. Once purchased, the cards are mailed to recipients along with an activation code and password, allowing them to buy goods on designated e-shopping sites without having to register with a name or ID verification.

Gifts that can be purchased with the cards include cameras, high-end liquor and tobacco worth thousands of yuan.

Additionally, the value of gift cards, ranging from hundreds to tens of thousands of yuan, can be converted into cash at e-finance websites like Alipay.

E-shopping stores tell reporters digital gift cards emerged as the best and safest way to send gifts after traditional gifting activities came under intense scrutiny during the government’s frugality campaign. They admit that many private enterprises purchase digital gift cards addressed to government organizations, but kept their customers’ names highly confidential.

The only regulation controlling gift cards in China is the Administrative Measures for Single-Purpose Commercial Prepaid Cards (Trial). Although the regulation requires buyers to provide their names and ID numbers to purchase gift cards exceeding 10,000 yuan (1,653), many e-shopping sites don’t require users to register with their real names before buying the gift cards.

The law also allows buyers to purchase an unlimited number of gift cards.

Experts have urged authorities to issue specific guidelines requiring buyers to register with their names and to limit the number of cards allowed to be purchased.

Sources: CRI, Beijing News (新京报), Xinhua News (新华网), Morning News (新闻晨报)

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A version of this post first appeared in the China Compliance Digest.