He tried to use a prepaid credit card, paid for in cash, but since the PATRIOT act, prepaid credit cards only work in person (and not even always then).
You can't use prepaid credit cards online without supplying your address and SSN to the prepaid credit card provider first, which most prepaid card providers don't even support in the first place.
Question: doesn't Bitcoin provide for anonymous transfers? Or no?
The problem seemed to be the lack of a billing address -- what are you supposed to put? Nothing worked. On another site that processed their credit cards via PayPal, it didn't work either. I called PayPal customer service and they explicitly told me they don't support cards that don't provide a means to verify a valid billing address and 3-digit security code.
Now, it's not like I don't have other identifiable information on my amazon account (a real credit card, a previously used shipping address, etc), so it's not anonymous, but they do accept prepaid cards.
I run pretty much everything through these cards online to avoid fraud / identity theft issues and prefer the ones that are easiest to register for online purchases.
Bitcoin transfers are anonymous but not untraceable, eg. with enough circumstantial evidence surrounding the transfer you can be fairly certain who made it... if you use a wallet service then its not really anonymous at all if you have access to the wallet providers database.
Here is a thought though: what if you got a prepaid credit card in another country? I suspect somewhere in Europe would be your best bet.
Also, how would the card company know that the transaction was online? It would be shady as all hell, but couldn't the merchant open a cornerstore and ring up all the online orders as chips and a smoothly?
I wouldn't be surprised if by breaking or even nudging their rules comes with a high enough price to kill the whole thing. You would be open to being ripped off painfully and your merchant account would probably be shut down pretty fast.
The legitimate but non-US prepaid card is still something I think could work though. I tried googling about it and didn't really find anything at all though.