The market for trading benefits for cash/services/products is quite robust in communities where it is the norm to be on them.

I think you would be quite surprised - it's a very well developed shadow economy that has pretty well known "rule of thumb" exchange rates, money changers, runners, etc.

This will pop up in any market that offers non-cash items of value.

I think I would be too, which is why I asked. Do you have any concrete examples of such a market? I mean, I put one right in my comment. How else do you do this sort of thing?

EDIT: I'm not trying to call you out, I just want to know how these things are done. Being on HN, I've seen stolen credit card marketplaces and things like that. Do people put their welfare payments on something like that? Do you have resources like that?

Try googling things like "food stamps black market"...

It happens, but it's only about 1%. How much time and effort should we spend trying to eradicate that last 1% of fraud?

[1] http://www.ktnv.com/news/busted-black-market-food-stamps

[2] http://www.washingtontimes.com/news/2013/aug/19/food-stamp-b...

[3] http://thoughtfulwomen.org/2012/10/16/black-market-for-food-...

[4] http://losangeles.cbslocal.com/2012/02/16/investigation-unco...

[5] http://articles.philly.com/1994-06-02/news/25833443_1_food-s...

Did you read #3?

"sales of Supplemental Nutrition Assistance Program vouchers brought in $858 million in cash in the 2009-2011 period"

That's almost $300M/year just for SNAP benefits. $300M here, $300M there, and pretty soon, you're talking real money.

What would a concrete example look like to you? They don't do these things on the internet or with apps, it's all face-to-face and word of mouth. I wouldn't bet on there being any academic studies of it either. Likely all we'll ever have is personal anecdotes from people who have been involved in these communities and somehow ended up spending much more time on the internet than is the norm there.

Someone else pointed out googling "tide as currency", and that opened my eyes. It made me realize that people doing this are working with pointers, not values.

All currency is a "pointer", not "value". That's the purpose of currency.

> on HN, I've seen stolen credit card marketplaces and things like that. Do people put their welfare payments on something like that?

Sometimes, yes, people sell EBT cards online (a quick googling finds numerous reports of this being done on Craigslist and Facebook.)

Othertimes, they convert benefits to concrete goods, which are then sold at below-market prices to convert into cash to by things that would not be allowed by the benefit program (or traded directly for other goods, with the seller of the other goods either using the traded goods or selling them for cash.)

Yep, I did some reading since my original post and came to the conclusion I'm just naive.

Here in Baltimore, the usual benefits fraud method involves small shop owners willing to claim false purchases to a given value, then disburse an equal value in cash partly to the benefits claimant and partly to themselves as a profit - so, yeah, you actually can just turn your SNAP card into cash, albeit at a sizable discount. No doubt the same is true of a Bridge card.

Google "tide as currency". It would be hilarious if it weren't so sad.

Huh. Thanks, I think. Not because of you, but because of humanity.

Theft and onselling of stolen goods is enough to make you question humanity? You really are naïve.

Yeah, that's why I said so before you did. Thanks?

They can simply sell the card at a discount to what it's worth. The buyer can then use it to purchase goods that he needs and pocket the difference, or resell them at normal retail or more. It's a huge problem.

http://www.al.com/news/birmingham/index.ssf/2015/06/fraud_ri...