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Encyclopedia :
G :
GR :
GRA :
Gratis Internet |
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Gratis Internet
Since July 2004, it has launched a number of websites offering "free" merchandise, most notably iPods, to users who register and complete "membership requirements." The processIn order to receive the advertised "free gift" at each of Gratis's websites, a visitor is expected to register and complete one affiliate offer. Affiliates include AOL, Blockbuster, RealNetworks, and others. The affiliate offers typically consist of trial memberships and credit card applications; all of them require credit cards during registration, and nearly all involve payment of some kind (hence the misleading "free" label). Then, he or she is required to refer a set number of people, which varies by program (the number required is usually the MSRP of the gift divided by US $5050). A valid referral is one who has both completed registration via a referral link and signed up for an affiliate offer. Each referral must be a unique user or your account will be "put on hold" during the approval process. The matrix scheme operates in that each user must refer a set number of people in order to receive his free gift. Using the Freeipods program as an example: Each user must complete one offer and refer 5 friends, all of whom must complete one offer each. Each of those 5 referred people then need to refer 5 more people each. The success in such ventures rests solely on the exponential growth of new members. The earlier a person registered on FreeiPods after its launch, the more likely he or she will benefit or will have benefited. The math behind the operationsAdvertisers pay Gratis between $25 and $90 for each new customer [1]. The MSRP of an iPod is $250. Six affiliate signups (the number needed for one user to redeem a free iPod) nets Gratis between $150 and $540. Per the program's terms, Gratis need not deliver an iPod to any member with four or fewer referrals. This makes up for any money lost through low-end advertiser payments. ControversyThe popularity of Gratis's websites erupted in early August and that success has prompted the company to create more similar websites with merchandise catering to other demographics. Hundreds of Gratis members have indeed received free iPods and other merchandise, as well as provided pictorial evidence. While the FreeiPods program appears to be legal under United States law, the controversy mainly rests on the morality of the matrix scheme core of the programs. Not only are early registrants more advantageous when obtaining referrals (characteristic of such programs that rest solely on exponential growth), members of Gratis's programs have posted much spam on bulletin boards and chat rooms violating policy. In addition, over the last few months (as of December 2004), an increasing number of Gratis members have been complaining about their accounts being placed on hold or their orders being delayed for no apparent reasons and without notification from Gratis. Gratis representatives have claimed that they have not violated their company's Terms and Conditions. Users who have been put on hold can visit imonhold.com to protest Gratis's treatment of its customers. On February 9, 2005, Gratis briefly lost support from TRUSTe due to multiple privacy policy violations [1]. On February 11, 2005, TRUSTe retracted its complains [1] There is one resolved complaint [1] against Gratis on file at the Better Business Bureau. InfluenceSince the success of FreeiPods.com, a flurry of similar websites have launched from October 2004 to today, offering anything from electric toothbrushes to condoms to iMacs. Some of the programs are of dubious legitimacy; all of them are capitalizing on this type of business venture as quickly as possible before it dies out, just as matrix and pyramid schemes did when customers began to wise up. Gratis's self-reported revenue in 2004 was US $15,000,000 [1]. List of Gratis websitesExternal links |
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