Stay Away From Envelope-Stuffing Schemes

Making Money, Personal Finance
make money stuffing envelopes

Stuff envelopes for $5 each! Make thousands of dollars every week just by mailing brochures! Get paid for staying home and doing a simple task!

Does that sound too good to be true? It is.

It’s unclear how long envelope-stuffing schemes have been around, but they’ve manifested as mailers, fliers and now websites. The Federal Trade Commission shut down an umbrella company for one of these schemes as recently as April. They all promise something similar: Pay an upfront fee for an opportunity to earn thousands of dollars per week doing menial tasks.

“We have yet to see any envelope-stuffing, work-at-home company that really enables you to make as much money as you could make at another kind of entry-level job,” says Katherine Hutt, national spokeswoman for the Better Business Bureau, a nonprofit that focuses on trust between businesses and consumers. “I think one of the reasons you’re still seeing these envelope-stuffing schemes is because they’re operating within the law. Not within the intent of the law, but certainly within the letter of the law.”

Ask questions

These companies expect people to sign up blindly because the deal they offer is too sweet to resist. If you decide to interact with one, ask every question you can think of. Some suggestions from the BBB website include:

  • What tasks will I have to perform? (The employer should train you about the process.)
  • Will I be paid a salary or a commission?
  • Who will pay me?
  • When will I get my first paycheck?
  • What is the total cost of the work-at-home program, including supplies, equipment and membership fees?
  • What will I get for my money?

If they deflect your questions or can’t give a straight answer, stay away. “Be really cautious, particularly if you’re not ever meeting them face to face,” Hutt says. If they make excuses, walk away.

Watch for the red flags

A typical envelope-stuffing scheme comes with these warning signs:

They require an upfront fee

These companies will ask that you pay them a chunk of money to start, much as a multilevel marketing scheme would ask you to pay for the first bit of product you sell. But you’re not actually selling a product, you’re just mailing things.

These fees could be as low as $29.99 or as high as hundreds of dollars. One recently shut down company, Java Enterprises, required between $99 and $399 to participate, with each increase in payment promising you increased income. According to the FTC, the average person who participated made $19.50. “You’re going into the job to make money,” Hutt says. “So why are they asking you for money?”

Payday isn’t clear

In the case mentioned above, those who participated were told they would get paid for every envelope they stuffed. But it turned out that when they received their starting kit, they were expected to market the brochures they were mailing and generate orders for more before receiving any payment.

In complaints against 1200weekly.com, which is currently operating, participants say they never even received anything to ship after they sent in money to pay for it.

Even worse, if you provide these companies with any personally identifiable information, watch out, Hutt says. Now they have what they need for identity theft.

There’s no outlet for questions or complaints

These kinds of companies typically aren’t transparent, and if you want to contact them for questions or complaints, it’s nearly impossible. The BBB received complaints that Saguaro, a now-defunct company investigated by the organization in 2016, had only an unmonitored phone line with no option to leave a voicemail.

If you find yourself in contact with one of these companies, report it to the BBB and the FTC. Both agencies have great guidelines on how to avoid scams. In some cases, these businesses have been outright combative with complainants. They lose nothing when they dismiss or fight you; they have your money and know you have little recourse.

There are better ways to get spare cash and work from home. Read up on how to avoid shady online business opportunities and how to make extra cash part time.

Veronica Ramirez is a staff writer at NerdWallet, a personal finance website. Email: vramirez@nerdwallet.com. Twitter: @veraudrey.