Paycation Review: Another Traverus MLM reboot?
Paycation appear to have launched in early 2014 and are based out of the US state of Texas.
The company claims on its website that it
works with Xstream Travel to provide members professional training to become a Referral Travel Consultant or a Certified Travel Consultant. Xstream Travel is a 12 year old licensed and bonded travel agency.
Listed as CEO of Paycation on their website is David Manning. Manning (right) first popped up on BehindMLM’s radar as the CEO of Xstream Travel and Traverus.
Traverus have a reputation for supplying travel services to a number of recruitment driven MLM schemes, with The Vacation Network being the one that first brought Manning to our attention.
Launched by former Traverus executive Richard Vincenti and marketed as ‘a one time investment of $150.00 and $12.00 per month to qualify you to earn commissions‘, sometime between now and March 2012 the Vacation Network seems to have collapsed.
Read on for a full review of the Paycation MLM business opportunity.
The Paycation Product Line
Paycation themselves don’t have any products, retailable or otherwise. The company are themselves an affiliate of a “group of travel partners”, with affiliates of Paycation only able to market membership to the company itself (which provides access to these third-party travel partners).
The Paycation Compensation Plan
The Paycation compensation plan largely revolves around the recruitment of new affiliates. Travel commissions are available but are mostly dwarfed by the affiliate recruitment components and associated commissions.
Paycation Affiliate Membership Ranks
There are five affiliate membership ranks within the Paycation compensation plan. Along with their respective qualification criteria, they are as follows:
- Executive – must have purchased Referral or Certified Travel Consultant affiliate membership and have recruited at least three Referral or Certified Travel Consultant affiliates – recruit at least six affiliates (three or more of which must be Referral Travel Consultants or higher)
- Regional Executive – recruit six affiliates (at least three of which must be Referral Travel Consultants or higher)
- National Executive – recruit ten affiliates (at least six of which must be Referral Travel Consultants or higher)
- International Executive – recruit fifteen affiliates (at least three of which must be National Executives in three separate unilevel legs)
- Presidential Executive – recruit twenty affiliates (at least three of which must be International Executives in three separate unilevel legs)
When Paycation customers or affiliates book trave services through third-party companies they are affiliated with, Paycation receives an affiliate commission.
Referral Travel Consultants receive 65% of this commission. Certified Travel Consultants receive 75%.
Note that no commissions are paid on airfare only bookings.
Paycation affiliates earn recruitment commissions when they recruit new affiliates into the business. How much of a commission is earnt depends on how much the newly recruited affiliate pays in membership fees.
A $10 commission is paid on the recruitment of an Independent Affiliate ($30) and $25 on the recruitment of a Referral Travel Consultant ($99.95) or Certified Travel Consultant ($199.95).
A $10 commission is also paid out on the acquisition of customers, with a customer account costing $39.95 upfront and then $29.95 a month.
The Coded Bonus is only available to Referral and Certified Travel Consultants.
It pays out $10 on the recruitment of new affiliates after the first two. If any of these affiliates go on to recruit new affiliates of their own, their first two recruited affiliates are “coded” to the affiliate who recruited them (along with the $10 commission).
This continues down an unlimited number of recruitment levels, always coding the first two recruited affiliates and $10 Coded Bonus to the original recruiter.
Coded Bonus Match
The Coded Bonus Match pays out a 150% match ($15) on all Coded Bonuses paid out to a Paycation affiliate’s first two recruited Referral or Certified Travel Consultants.
After the first two, a 100% Coded Bonus Match is paid on all Coded Bonuses paid out on subsequently recruited Referral or Certified Travel Consultants.
The first type of residual commissions in Paycation are paid out using a unilevel compensation structure.
A unilevel compensation structure places an affiliate at the top of a unilevel team, and places every personally recruited affiliate directly under them (level 1).
If any of the level 1 affiliates go on to recruit new affiliates of their own, they are placed on level 2 of the original affiliate’s unilevel team. If any level 2 affiliates recruit new affiliates, they are placed on level 3 and so on and so forth down a theoretically infinite number of levels.
Paycation pay out a flatrate 8% commission on membership fees paid by recruited affiliates in a unilevel team, paid out down an infinite number of recruitment levels.
Matching Unilevel Bonus
A matching bonus is available to all Referral and Certified Travel Consultants, paying out a 100% match on all unilevel commissions paid out to personally recruited Referral or Certified Travel Consultants.
The second type of residual commissions paid out in Paycation use a 3×7 matrix compensation structure.
A 3×7 matrix places an affiliate at the top of a matrix, with three positions directly under them (level 1):
Each of these three level 1 positions branch out into another three positions (level 2) and so on and so forth down a total of seven levels (29,523 positions).
Matrix positions are filled via the direct or indirect recruitment of new affiliates, with each filled position generating a monthly commission.
How much of a commission is paid out depends on what level of the matrix a filled position falls on:
- Level 1 – $2
- Level 2 – $6
- Levels 3 and 4 – $2
- Levels 5 to 7 – $8
Paycation affiliates must also qualify to earn commissions on all seven matrix levels, as per the following qualification criteria:
- recruit at least one Referral or Certified Travel Consultant – unlock levels 1 to 4
- recruit at least three affiliates (any rank) to unlock level 5
- recruit at least six affiliates (any rank) to unlock level 6
- recruit at least ten affiliates (any rank) to unlock level 7
Note that once a Paycation affiliate qualifies for commissions on level 6, they also receive a 10% matching bonus on matrix commissions earnt by their personally recruited affiliates (min $30 commission must be paid out to trigger the bonus).
Business Builders Bonus
The Business Builders Bonus is only available to National ranked affiliates or above, and kicks in after a Paycation affiliate has recruited seven affiliates.
The bonus pays out an additional 5% on the sales volume generated by an affiliates eight and onwards personally recruited Referral and Certified Travel Consultant affiliates.
Under the Lifestyle Bonus, International Executives receive a $600 a month cash bonus. International Executives receive $1000 a month.
Affiliate membership with Paycation is available in one of three options:
- Basic affiliate membership (Independent Affiliate) is $29.95 a month
- Referral Travel Consultant affiliate membership is $99.95 and then $59.95 a month
- Certified Travel Consultant affiliate membership is $199.95 and then $59.95 a month
How much an affiliate pays in affiliate membership fees has a direct impact on commission eligibility and payouts through the Paycation compensation plan.
Whereas it’s nice to see travel commissions Paycation make through their affiliate agreements shared with their affiliates, unfortunately it’s quite obvious that most, if not all, of the revenue generated by the company is going to be sourced from affiliates.
At $39.95 and then $29.95 a month, I think it’s safe to assume retail activity will be minimal to non-existent within the company.
Further supporting this is the fact that nearly all of the commissions and bonuses paid out in Paycation’s compensation plan revolve around affiliate recruitment and payment of monthly affiliate fees.
How much an affiliate pays in fees directly affects many of their commission payouts and where they don’t, affiliate recruitment quotas apply. In this sense Paycation is no different to the scores of collapsed MLM travel-niche pyramid schemes that have come before it.
The $10 – $25 commissions on the recruitment of new affiliates alone drag Paycation squarely into pyramid scheme territory.
With Traverus services many of these opportunities over the years, I suppose it should come as no surprise that CEO David Manning himself is now launching his own travel-niche opportunities.
There’s clearly an emphasis on signing up as a Referral or Certified Travel Consultant (paying more in affiliate fees), and then recruiting others who do the same.
As with all recruitment-driven schemes, once those at the bottom cannot find anybody to recruit they will stop paying their monthly membership fees. This means those above them stop getting paid and then they too stop paying their fees.
This effect trickles up the company over time until it triggers an irreversible company-wide collapse.