Is this a scam?
Short answer, NO! There's a lot of money to be made in freebie sites. When you sign up and complete an offer for a freebie site, the freebie site get paid a bounty by the advertiser. Also, the advertiser potentially makes a lot of money off of users that continue with the service they signed up for. Last but not least, you and I get freebies!
What's the catch?
Good question. You obviously realize that you aren't going to sit on your couch and then next week a bunch of expensive gifts are NOT going to just show up at your door for no reason other than you wanted one. The catch is that you must complete an offer for an advertising company and then refer X number of friends to complete offers as well. That way the freebie site gets paid from the advertiser, the advertiser gets potential customers, and most important of all you get a freebie!
How do the freebie sites make money?
Warning: (OK not really a "warning" but...). The concept of a freebie site is very complex, hence the reason there are so few. Below is my best effort to date at describing it but it still is inefficient. My hope is that you understand the general concept.
The way this works is there are essentially 3 parts to this. The Advertiser (the company with the offers), The Freebie Site (the company that sends your freebies), and You. Imagine you are company with a lot of money and you have run out of advertising ideas. What most companies do is create an "Affiliate Program". An affiliate program is when a big company pays either other companies or other people to find customers for the company.
So the big corporation comes to a freebie site, let's say Transcendent Innovations (by far the most reputable freebie network to date). The big corporation comes to Given2Me says they will pay $50 for every new customer Given2Me refers to try the big corporation's product or service. Why $50? Because when you sign-up for their offer your might have to pay $10 for their product or service. Now the big corporation is only paying $40 out of pocket for your business. Then consider how much money is spent on adverting and marketing for new customers (a lot more than $40 each). Also consider that you might actually choose to continue their with their product or service for $10 a month so they end up making all that money back. In the end it is all worth it to the big corporation.
Then the freebie site (Given2Me) adds the big corporations' product or service as an "offer" on all of their network (currently 12 different freebie sites). Then Given2Me offers a gift to you, for example a $400 iPhone, for 9 signups (you +8 referrals). Calculate the 9 sign-ups times $50 for the referrals equals $450 for TRAINN. They pay out a $400 iPhone and in this scenario make only $50. Which is actually hardly worth the effort to be honest. So lets take this example to the next step as to how this situation will most likely play out...
Referral 1- gets 0 of their own referrals and abandons their account (probably one of your friends you had sign up)
Referral 2- gets 0 of their own referrals and abandons their account (probably one of your friends you had sign up)
Referral 3- gets 0 of their own referrals and abandons their account (probably one of your friends you had sign up)
Referral 4- gets 1 referral but then quits and thinks it's too hard (probably ran out of friends and didn't want to try and get strangers to sign-up)
Referral 5- gets 2 referrals but then quits and thinks it's too hard (they probably ran out of friends and didn't want to try and get strangers to sign-up)
Referral 6-gets 3 referrals but then quits and thinks it's too hard (they probably ran out of friends and didn't want to try and get strangers to sign-up)
Referral 7-gets 4+ referrals before going the route of the referral 4, 5 and 6.
Referral 8- MAYBE gets all 8 referrals and gets their free iPhone
...which brings the grand total to 28 referrals from your account alone. Now multiply that by the rate from the big corporations of $50 which equals $1400 and all they have to do is pay out 2 iPhones ($800), and ends up with a profit of $600 off of your account alone. Now multiply this times several thousand accounts and take it further down the chain and you get the picture.
The freebie site makes a lot of money, the big corporations make a lot of money, and you get an expensive gift for FREE! It's a win-win-win!
Additional Questions: Please ask them as a "comment" and I will post them and their answers here!
