You’ve seen them everywhere–Google, Facebook, MySpace, etc.!! They are those little annoying ads that show up telling you that you can get an iPad, an iPod, a Macbook or some other expensive gadget for FREE.

Naturally, you click through only to feel duped because now there’s all sorts of ‘offers’ you have to complete. In my opinion, you shouldn’t feel duped–you should probably feel a little naive for thinking that you were really going to get a $200-2000 item for doing nothing. After reading a blog post on Technologizer.com, I was amazed to see how many people think these offers are outright scams.

Are they scams?

Ok, so you clicked an ad and now you want to know if you’re about to be scammed, right? Perfect, I’m here to set the record straight for anyone who’s still cloudy on this topic.

Before I get into the specifics, let’s define a couple of related terms:

• scam (noun) – a device (website, contract, etc) used to cheat or defraud
• scam (verb) – to cheat or defraud
• scammed (past tense) – having been defrauded or cheated
• mislead – to lead astray, deceive or guide wrongly

Now that we know what the difference between a scam (or to be scammed) and something that’s misleading, we can continue.

The reason I put misleading in there is because once I prove to you that these offers are not scams, the next thing you’re going to say is that they are misleading and if that’s what you believe, then ok. I, on the other hand do not feel that these ads are scams or are misleading and here’s why.

To me, an ad that is misleading would be this:

Sign up today and get a FREE iPad! Simply enter your email address and we’ll ship your new gift directly to your house!!

An ad that is not misleading would be this:

Sign up today and get a FREE iPad! *Participation in promotional offers required. (The last part will likely be in fine print.)

How do these offers work?

Each company has a different approach to the same end result, but in general, the company has a sponsorship deal with the advertising company in which the advertiser pays the promoter an affiliate bonus for every customer they send them. This bonus is what the promoter uses to pay for your free gift. So how can they afford really expensive gifts and still make money? That’s where simple math comes into play.

I run a website and I have a few sponsored ads throughout my website, so I know how much can be made on deals like these, but for this example I’m going to use simple (yet realistic) numbers to illustrate how this is all possible.

Let’s take a standard “FREE iPad” offer. The promoter tells you to get your gift you have 180 days to complete a total of 13 offers from 3 tiers. There are three key facts in that one sentence. First, you have 6 months to complete the offers. Second, you have to do 13 offers and third is that the offers are broken into tiers.

1. Time limit: The promotion company is banking that you don’t have what it takes to comply with all these rules and this is where they make the real money. Imagine if 100 people completed 11 offers, but ran out of time before they could do two more. The promoter just made affiliate bonuses on 1100 offers and didn’t have to ship 1 iPad! If each offer earned them about $50, they just walked away with $55,000! Hopefully this clarifies how it’s possible to afford such expensive gifts.
2. 13 Total Offers: That’s a lot of offers and it’s easy to get confused and lost in all the signups you’re about to get involved with. Again, the promoter hopes that you stay confused so you either a) don’t get all 13 or b) stay a subscribed member so they can continue making affiliate bonuses off you.
3. 3 Tiers: One such offer site mentions you have to pick 2 offers from tier 1, 2 offers from tier 2 and 9 offers from tier 3. The reason they do this is because the offers range so dramatically from things like subscribing to a magazine for 3 months to applying for a car loan. It would be unfair to make you apply for 13 car loans, so they break them down into manageable groups.

As you can see if you apply some basic math, even if every single person did every single requirement and they shipped out an iPad for every person, they are still not losing money depending on which model they ship. Plus, $50 is an average amount. I’ve heard of affiliate payouts being much higher.

My two cents

To call this a scam, you would be implying that these companies are promising you one thing and backing out at the last minute thus robbing you of your free gift. Aside from these offers consuming loads of time and aside from you perhaps making a mistake of not completing one of the required terms, there is no way you will not get your free gift. It would also be a scam if these companies were asking for money and not following through on their promises.

So, for all those that still think these offers are scams, listen up. It’s natural to feel “scammed” after seeing an ad for an offer claiming you can get some really expensive gadget for free (iPad, laptops, big screen tvs, etc) only to discover that there’s a “catch”. But just because this upsets you, does that mean it’s really a scam? Of course not! That’s like saying you signed up for a credit card with a 0% intro rate and then 6 months later, you’re surprised to be hit with a 19% APR. You should only be surprised if you didn’t read the fine print and only be mad at yourself that you didn’t. Offers like these and others like home loans, car leases, hotel rentals or anything you sign a contract for should not be obtained without having read the fine print first! That’s just common sense.

Hopefully now we can all agree that they are not scamming anyone. Just read the details clearly if you’re interested and follow all the rules. It’s not that difficult if you’re paying attention and you will certainly get a free gift at the end. By the way, if you still think this process is a scam, you probably also believe that Quibids is a scam too.

A little history

So where did all these offers start?? As far back as I can remember, it all happend around the time when the 3rd gen iPod came out when a company called FreeiPods.com started offering free iPods to anyone who signed up for 1 offer, but then you had to get 5 friends to sign up under you and they each had to complete 1 offer themselves. After all this happened, you were sent a free 20GB iPod. I was able to score two during this time. The problem with this setup (if you haven’t noticed already) was that it was a pyramid scheme. What this meant was only the people who started first were getting the free iPod because at some point, there was nobody left to sign up (to get your five friends) because everyone was out trying to get 5 more people! Make sense?

That’s when the complaints started…people weren’t getting their iPods, so they felt cheated. Well, since they never paid any money up front, then what were they exactly cheated out of? Perhaps they were cheated out of the chance of getting a free iPod, but this hardly equals a monetary value.

Anyway, the business model was changed to allow people to bypass getting referrals and instead, just complete more offers. Eventually, the whole “referral getting” model was scrapped and now we have the current business model which is simply completing multiple offers. They even added a twist–you only have 6 months to complete everything! See, the ones offering the free gifts are hoping you can’t complete everything in 6 months.