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Gratis Internet is a Washington, D.C.-based referral marketing company that rewards customers with products of high-demand such as the iPod and Playstation 3. As of 2004, it is a member of the Inc. 500; while in 2005 Gratis' name was found sitting at number eighteen in the top twenty. Its name comes from the Latin word Gratis, meaning free of charge.
Based on Better Business Bureau files, this company has an unsatisfactory record with the Bureau due to unanswered complaint(s). In the last 36 months to February 2008 Better Business Bureau has processed 866 complaints about Gratis Internet.
History
Gratis Internet was established in 2001. Since July 2004, it has launched a number of websites offering free merchandise, most notably iPods, to users who register and complete membership requirements. Although the word "free" is used prominently, would-be members seeking to complete an offer to qualify for the free merchandise are often given a number of options, some of which involve signing up and paying for a service or subscription. Gratis has launched its websites in the US, UK, Canada, Germany and more recently Australia. In August 2005, Gratis Internet branded its websites as FreePay.
Gratis's revenue in 2004 was US $20,479,325.00 according to Inc.com. Inc.com also reports that Gratis Internet has only 12 employees.
In March 2006, Gratis Internet announced new terms of service imposing time limits , which have been controversial among users.
FreePay Process
See: Viral Marketing
In order to receive the advertised "free gift" at each of Gratis' websites, a visitor is expected to register and complete one affiliate offer. Affiliates include AOL, Blockbuster, RealNetworks, casino and credit card offers, and others. The affiliate offers typically consist of trial memberships, service subscriptions, credit card applications and the like; some require credit cards during registration, and a few involve payment of some kind, causing critics to claim the "free" label a misnomer.
The visitor is then required to refer a set number of people, which varies by the product (the number required is usually the MSRP of the gift divided by US $50). A valid referral is one which has both completed registration via a referral link and signed up for an affiliate offer. Each referral must be a unique user or the account will be "put on hold" during the approval process. Because sponsors must acknowledge the completion of their offer, they are willing to invest more for each referral than they might for other, more traditional forms of advertising.
The advertisers pay Gratis for the referral, between $25 and $90, though the company has not released information as to specific numbers. For example: assuming the MSRP of an iPod is $250, five 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 does not need to deliver an iPod to any member with four or fewer referrals.
Controversy
The popularity of Gratis' websites erupted in August 2004 and that success has prompted the company to create more similar websites with merchandise catering to other demographics.
Thousands of Gratis members have indeed received free iPods and other merchandise, as well as provided pictorial evidence. While the 'Free iPod' 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' programs have posted much spam on bulletin boards and chat rooms violating policy.
The controversy becomes harder to resolve because many of the sites "proving" that FreePay is not a scam are in fact sites produced by people seeking to get their own referrals. There are however a number of forums populated by large communities involved in the free gifts scene, and many of these members report positive experiences with the websites involved. With such communities comes a wealth of information relating to websites such as FreePay, allowing individuals to make informed decisions regarding the legitimacy of their chosen affiliate site.
References
- http://www.dc.bbb.org/report.html?compid=W1035561&national=Y
- http://www.dc.bbb.org/report.html?compid=W1035561&national=Y
- "Gratis Internet". Inc.500. Retrieved 2006-03-26.
- Balfour, J. (2006). "The FreePay Phenomenon". FreebieScout. Retrieved 2007-11-03.
- Jake (2006). "The Official Word". The FreeiPodGuide Forums. Retrieved 2006-03-26.
- Kahney, Leander (August 18, 2004). "Making Free IPods Pay Off". Wired.
- Hanley, Derek (September 21st, 2007). . Gimme4free.
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