FreebieScoop

Everybody has seen those pesky banners online that tell you to click for a “Free iPod Touch” or a “Freebie Xbox 360″. Most people dismiss them as scams, but the truth is that they aren’t all scams. Some are, some aren’t. That’s why we have FreebieScoop. Here we share information about the legitimate freebie sites so that we can all get our free stuff.

First, you must understand that no matter how many times these sites call their gifts “free”, they are not really free. Sure, you don’t directly pay for your gift, but you must still sign up for trial offers of products such as Blockbuster, Netflix and Gamefly; we’ll get to that later though. So, instead of free, maybe we should say you can get your iPhones and laptops very cheap.

To get a better understanding of how this works, let’s see how the large freebie sites like FreePay, MegaFreebie, Trainn and i-Deal Direct pay for your gifts. If you don’t know who these companies are, don’t worry, eventually they will all be familiar to you.

When you sign up at any of these websites they will require that you sign up and order trials of products. One example is Netflix. Currently it costs $8.99 to sign up for service from Netflix that allows you to have one DVD at a time. In exchange for you signing up for Netflix through the freebie website, Netflix pays a commission to the freebie site for bringing them a new customer (you). This commission is greater than the price you paid for the trial because Netflix is hoping that you keep their service and they make back their money. The freebie websites will require you to sign up for multiple such offers or will require you to refer friends to do the same. The commissions that these freebie sites receive is then pooled together to purchase your free iPhone or whatever you are trying to earn.

Check out the simple diagram we made to show you exactly how the whole processor works.

You sign up with the freebie site and complete three offers. For this example we used Netflix ($9), Blockbuster ($10), and GameFly ($6). This costs you a total of $25.

The advertisers you signed up with pay the freebie website a total of $150 for your offers completed. They do this because they hope you will stay past the first month and that in the long run they will make money from you.

The freebie sites buys your iPod. They get your gift for less than it costs in stores because they buy them in bulk and get discounts. The freebie site then keeps a small amount as profit.

The idea of this model is to create a win-win-win situation. The theory is that you will be happy because not only are you exposed to great products such as Netflix, but you receive a free reward. The advertisers are happy because they increase their customer base. The freebie website also wins because even though most of the commissions it receives are used for your gift, some are kept for them as profit. This business model is legitimate, and is often referred to as incentive marketing. There is nothing illegal involved. The rewards are not stolen and you are not taking part in any type of ponzi scheme.

There are other ways in which this model is tweaked such as breakage (requirements that make the freebie sites hard to complete). We will save these for a later time because it is important to understand the basics of how these websites pay for your gift, but the details are less important right now. You now know that these companies aren’t there to scam you and don’t simply give away free gifts.