In the video game aisle of a Walmart Supercenter, Eric, 43, is refreshing his phone. The Superman logo on his T-shirt has been reworked into a hammer and sickle. He’s waiting to hear back from a stranger based, as far as he knows, in Kenya. “He just offered to pay $400,” Eric says. “I don’t feel 100 percent on him, but I don’t have anything real to base it on.”

Eric is a currency broker. But he doesn’t work on Wall Street, or at the Chicago Mercantile Exchange, or with any financial institution. He’s one of the thousands of Americans who have built a career out of the bitcoin phenomenon, whether out of necessity or a sense of entrepreneurship. It’s enabled Eric to stop toiling as an information technology engineer for software companies and set his own hours. “Never in my life had I thought I’d work for myself,” Eric explains.

His operation mainly consists of a phone and a couple of apps. But it also requires daily visits to his version of the trading floor: Walmart. Eric visits big box stores so often that he knows the self-checkout machines (his preferred method of payment) better than the clerks who work there. He goes to Walmart to buy gift cards, which serve as a medium of exchange and a means of protection from being duped by his clients. But the whole scheme relies on exploiting Walmart’s rather lax standard on gift card purchases. Eric believes, through his up-close experience, that these lax standards have been facilitating rampant gift card fraud, which has risen to epidemic levels as of late.

Eric will end up netting $12 on this transaction, but he did it at a discount, to make sure he had a customer. He wanted to make sure he could demonstrate to a reporter precisely how it’s done, on the condition that his real name not be used. The goal, he said, was to expose vulnerabilities in Walmart’s gift card policy, so that the company would take action. On Tuesday, Walmart did just that, sort of, announcing new rules in the way it treats such cards, upending a world that Eric offered The Intercept an invitation to explore.

The new policy will make it difficult for Eric to make ends meet, but he’s glad it happened. “I’m a socialist in a capitalist world,” he explains.

Eric became fascinated with bitcoin while using it for offshore gambling sites. That led him to his trading business, which he’s operated for over three years.

Here’s how it works: Eric sells bitcoin to buyers all over the world through a peer-to-peer marketplace called Paxful, charging a premium for the cryptocurrency. When Eric started his business a couple of years ago, he could charge a 100 percent markup — selling $300 in bitcoin for $600 — because buyers expected the cryptocurrency’s price to elevate, and had few options to obtain it. Nowadays, with more volatility and more competition among traders, that has dropped to around 30 percent. Paxful takes a small slice of each transaction on their service, usually about 1 percent.

In exchange for the bitcoin, the buyers typically swap gift cards, which are less traceable than dollars or yuan and, thanks to globalization, broadly useful all over the world. No physical card changes hands; Eric will get the number from the gift card and load it into an app called GiftMe, which generates a barcode that can be used at a checkout counter.

Sometimes the transaction stops there: Eric can use a gift card to buy essentials. But repeated trading requires an endless stream of bitcoin, more than he could mine or purchase on his own. So he has to use the gift cards to acquire more bitcoin, making his money on the spread between what he’s charged to buy it and what he charges to sell it.

As an intermediate step, Eric uses the gift cards he receives to buy other gift cards. This is important for a couple of reasons. First, certain gift cards are desirable to resellers overseas. Cards for electronics are especially attractive — iTunes, PlayStation, and Steam in particular. Those can be sold to customers in Brazil, Pakistan, and elsewhere. Even particular denominations are seen as attractive, because they can be more easily sold on the street. “If I take all these $10 cards, they won’t have any in stock for a month,” Eric says, rummaging through the gift card displays, explaining why he’s willing to travel 45 minutes to Walmarts in his area, just looking for the right cards.

Buying new gift cards also performs a kind of asset protection function for Eric. Scams are commonplace in the gift card trading world. Eric tries to engage in due diligence with his buyers, checking their prior transactions on Paxful. (If there are disputes about transactions, Paxful will help settle them with a court-like process.) He delays the release of bitcoin to his clients until he spends every last cent physically in a store, to ensure that the transaction is legitimate. But exchanging gift cards for gift cards adds to his security. “It’s so I have a card that no one but me and whoever I’m selling it to has seen,” he says. “I do try to avoid getting burned, but also try to avoid being part of burning someone else.”

Armed with fresh cards, Eric then sells them to accumulate more bitcoin. Again, the cards don’t actually change hands; Eric sends the codes through WhatsApp or another messaging system. The margin between what Eric charges for bitcoin and what others charge him represents his profit. Eric, because of how long he’s been in the business, has become adept at finding the best spreads, whereas his customers just want their bitcoin. On his trade with the Kenyan for the $400 gift card, he charged a 28 percent markup, and flipped the cards for bitcoin at a 25 percent markup. He walked away with a 3 percent margin, or $12.

If Eric can replicate that, he can make a living wage; some days, he’ll sell as much as $12,000 in bitcoin, which can translate to $300 or $400. Eric estimates that thousands of people exist in this informal economy, whether selling gift cards on the street, to pawn shops, or through online exchanges. Illicitly acquired gift cards have even been used to pay for opioids.

Technically speaking, reselling gift cards violates the terms of service. Everything else Eric does merely involves trading one legal thing of value for another. But he is very open about the nature of the world he traffics in. “I might sound to you like a scammer,” he says. “Don’t worry, I won’t take it the wrong way.”

The prevalence of illicit activity with gift cards, which invites a crackdown, has posed a threat to his career, with the only saving grace being the relative indifference at Walmart.

Walmart was not originally Eric’s favorite store to carry out his business. “I was on a first-name basis with everybody at Best Buy and Target for a long time,” he says. But over the summer, he went to ring up an order at a self-checkout counter at Target, and discovered that the company no longer allowed people to buy gift cards with other gift cards. “It changed overnight. The people at the stores were blindsided.” Days later, the same thing happened with Best Buy.

The companies, which do a lot of business in gift cards, had good reason to restrict purchases. A Federal Trade Commission bulletin in May warned Americans of an epidemic of gift card fraud. Specifically, the FTC highlighted callers claiming to be with the IRS or a family member and asking for payments in gift cards. Unsuspecting victims then buy gift cards and hand over the codes. Scammers can use them to either buy goods and services, or flip them in the resale market while simultaneously draining them of funds, making money twice on the same card.

This is just one way gift cards can lead to fraud. “Another way would be hacking accounts: People get the account numbers and take the balance off them,” said Joyce Carter, a vice president with Member Access Pacific, which manages gift and other card programs for businesses and credit unions. This can be done manually, by stealing cards at stores or memorizing card numbers at the sale display, or through more sophisticated means, like computer-aided phishing for card numbers or counterfeiting. There is rich variety in the scams.

Buying gift cards with other gift cards launders fraudulent or illegally obtained card codes into new, legitimate ones. It’s a common method for scam artists. “That type of fraud is happening a lot,” said Carter. According to the National Retail Federation, organized retail crime, which includes but is not limited to gift card fraud, costs retailers $726,351 for every $1 billion in sales.

Though retailers have traditionally not been on the hook for gift card fraud, that liability has shifted somewhat with the advent of chip readers at retail outlets. In particular, merchants that allow customers to swipe cards instead of reading them with chips face chargebacks from issuers on counterfeit transactions. Because of these new rules, retailers started to require that all gift card purchases be made in cash.

In a statement, Target spokesperson Danielle Schumann said the company “takes a comprehensive approach to preventing gift card scams that includes partnerships with law enforcement, technology enhancements and team member training.” That includes barring gift card purchases with other gift cards, as laid out on the Target website. Best Buy did not respond to inquiries, but their website notes that gift card purchases are limited to $500, and Eric’s experience indicates that they no longer let customers make gift-card-for-gift-card swaps.

Eric claimed to me that Walmart, prior to this week, had no restrictions on purchasing gift cards with gift cards. And indeed, I watched him pull it off.

After Eric got the $400 Walmart gift card code from the bitcoin buyer in Kenya, he pasted it into the GiftMe app, generating a bar code. He picked up seven $10 PlayStation cards, and a handful of $20 and $30 cards from PlayStation and Steam. We went to pay at the counter, and the sales clerk methodically scanned and activated the stack of gift cards. Eric was able to pay with the $400 Walmart gift card he’d purchased seconds earlier from someone halfway around the world. He didn’t have to show ID or the physical card. “You have a nice day,” Eric said to the clerk upon leaving.

Eric paid for the gift card used for his purchases. But it could just as easily have been a counterfeit, or a clone, or a stolen card, laundered through Walmart’s transaction into something legitimate. Back in the parking lot, Eric told me, “I walk out of Walmart all the time thinking that someone like me, with less scruples, could be walking out, too, without getting hassled.”

When I asked Carter about Walmart’s practices, she responded that the retailer should be more mindful of fraud. “If I’m buying more than five or six gift cards, [Walmart] might want to think about security,” she said.

Though Walmart has relatively more liability for gift card shenanigans, Carter said the burden remains disproportionately placed on consumer victims, and in particular the issuers that allow their card to be sold at Walmart. “They’re the ones taking the most risk. Most of the time the retailer doesn’t have anything to lose when it comes to fraud.”

Eric’s other interactions with Walmart left him skeptical that the company has much interest in preventing gift card fraud. Recently, a scammer tried to sell him two $1,000 Walmart gift cards, and when he checked them, he saw they were already being spent down online. “These were online orders that hadn’t shipped yet; Walmart could stop the orders to stop the rip-off,” he said. “They had no interest. I got all the way to a supervisor, and he said, ‘We don’t involve ourselves in a consumer’s personal business.’ But it’s fraud! They’re being used to facilitate fraud.”

In other words, Eric says, Walmart views gift cards as cash, and it doesn’t go around wondering whether purchases at their stores are made with stolen dollars. This is true of most retailers. “To them, revenue is revenue,” Eric said. “They very specifically don’t give a fuck about crimes involving their store if they’re not directly liable or directly hurt.” It can also be difficult to solve those crimes, putting a Walmart employee in the position of adjudicating which owner of the $1,000 gift card has the legal right to use it.

In October, Walmart spokesperson Randy Hargrove said in a statement to The Intercept, “We take this issue seriously and have measures designed to help guard against these types of crimes. Like many retailers, we are looking at this issue, the controls we have in place, and we are continuously working to enhance our gift card program to better serve and protect customers.”

It turns out that Walmart was more involved in reforming its practices than I knew. After a year-long investigation by the attorneys general of Pennsylvania and New York, Walmart, Best Buy, and Target announced new nationwide policies to deal with gift cards. Reuters reported that the changes would lead to “prohibiting the redemption of store-branded gift cards for other gift cards” — exactly what Eric wanted to happen.

That’s not quite right. As Pennsylvania Attorney General Josh Shapiro detailed in a press release, the main changes included limits to the monetary value that gift cards are sold for, and how much money can be loaded onto a gift card. As for trading gift cards for gift cards, there are restrictions on the purchase of iTunes, Steam, or Google Play gift cards, some of the main ones sold into the black market.