Savings Highway Review: Membership benefits scheme
Savings Highway was launched in late 2006 and despite the company’s “terms and conditions” referring to it as “a Delaware corporation“, lists virtual office space in the US state of Georgia as its official address.
Management wise Savings Highway was founded by Steve and Maria Gresham, who are married and serve as the company’s CEO and Chief Financial Officer (CFO).
In his Savings Highway company bio, Steve Gresham (photo right) is credited with having
over 22 years of successful experience in home-based business operations, both as a representative and owner.
Prior to launching Savings Highway in 2006, Gresham founded “Movie Club Plus” and served as the President of “Better Universe”.
Both companies are now defunct with Movie Club First coming first and then being relaunched as Better Universe. Both companies it seemed focused on entertainment technology.
Better Universe wrapped up in 2007, with Robert Bowen putting out an email to the company’s affiliates, writing specifically about Steve Gresham:
Our previous president (Gresham) wanted to control everything else in its entirety, including commissions, cash flow, our programmers, and paying our vendors. He said he needed to do this to keep everything in control.
This was how things were operating until late in January 2007 when I emailed our previous president to express my continuing frustration with the way he was running the corporation and several days’ later he sent me a certified letter announcing to me that he “resigned” without any warning or notice of any kind.
Our previous president, who always told us “Winners never quit and Quitters never win”, had quit each and every one of us without any notice or warning of any kind.
But after researching what has happened over the past months, he really left us many months ago.
Our previous president then sent me another certified letter the day after he quit stating that he needed me to pay all our commissions on time and pay our vendors on time or let him know as he is still a shareholder of our parent company MovieClubPlus.com, Inc.
Then I find out, the day he quit, he did some very large withdrawals from our corporate bank accounts. Basically removing most of the cash from the corporation, he also had our merchant account company inform me on February 1st that our merchant account was closed.
After calling to talk to them, they had been trying to work with our previous president for the last several months, but they saw no improvement in our chargeback ratio’s (which were always under 1% when I used to managed them), but had slid up to 7% in January while our previous president looked on, so our corporation’s merchant account company was forced to close our four year old merchant account.
February 1st was the first day that I heard that there was a problem with the corporate merchant account.
I have worked diligently over the past two weeks to get a new merchant account, but with the high chargeback’s ratios, and very little cash in the bank, no merchant company will approve us.
A merchant account is the lifeblood of a company such as BetterUniverse.com. Without a merchant account, very little cash comes into the corporation.
Then I started hearing from our vendors, who stated that they have not been paid in the last five months and were demanding payment. Again, this was our previous president’s responsibility up until the day he “resigned” without any warning or notice of any kind.
After our previous president’s resignation I find that the corporation is in debt many ten’s of thousand of dollars, many of these debts, our previous president told me were paid, many others, our previous president never even informed me that the debts existed.
At the same time many members have called our new phone number, complaining that their support tickets have not been handled, or they have not been paid commissions.
After researching this I find that our previous president’s wife (Maria Gresham), who was paid a salary to handle support for our corporation, hasn’t handled any support tickets in many months. And the fact that December commission checks that our previous president committed to me were paid, were not.
I also find out that our previous president, and our corporate programming staff spent much of their time since September working on a separate site under a different company name, and tied it to BetterUniverse.com back office, all without any benefit to the corporation or our members, all while being paid a salary by BetterUniverse.com.
Our previous president also used many of our corporate assets to create his new company without permission or compensation to the corporation. All this while ignoring your support requests, phone calls, commissions, our vendors, and our merchant account.
I have written our previous president a series of letters to try to save the company, and I even gave our previous president one last chance to return the money by 5pm today, I told him without it BetterUniverse.com would be forced to close, from this letter, I received a response from an Lawyer, that our previous president hired with corporate funds, that he does not owe the corporation any funds.
So it is due to these actions by our previous president, and with a very heavy heart that I must announce the closure of BetterUniverse.com.
I am sorry for telling you this via email, but I thought it was the right thing to let you know what had happened.
No one was charged for their benefits in February. Even if you received a credit card receipt, the merchant company assures me that you were not charged. I thank you in advance for your understanding in this matter.
Sincerely,
Robert T Bowen
Board of Directors
BetterUniverse.com
With Savings Highway launched late 2006 and the above letter sent out in early 2007, It would appear that the apparent gutting of Better Universe was the foundation of the launch of Savings Highway.
Read on for a full review of the Savings Highway MLM business opportunity.
The Savings Highway Product Line
Savings Highway has no retailable products or services. Within the company and its compensation plan, the only thing members are able to market and sell is membership to the company itself.
Savings Highway offers a (sic) membership benefits packages which are intended to help people to save money on products and/or services they may purchase.
Membership to Savings Highway comes in a variety of plans (see “Joining Savings Highway” further down in the review), with some of the services membership provides access to including:
- roadside assistance
- legal services
- ID theft protection
- restaurant discounts
- accommodation discounts
- discounted magazine subscriptions
- “doctor visit”, medical equipment and surgery discounts
- discounted moving services
- dental plans
- ebook and audio library
Note that these services are all provided by third-party vendors and are not provided by Super Savings Highway themselves:
SavingsHighway.com, LLC does not guarantee the quality of any product or service contained within a SavingsHighway.com membership because many benefits and services are offered by 3rd party vendors.
The Savings Highway Compensation Plan
Savings Highway offers members commissions focused on the recruitment of new paid members, with a focus on getting people to sign up at the “Ultimate” membership level ($149.99 a month).
Residual Recruitment Commissions
Savings Highway pays out monthly commissions upon the recruitment of new members and their continued payment of monthly membership fees:
- for each Ultimate Member signed up, the recruiting member earns 33% of their monthly membership fees ($50)
- for each Family Super Saver member recruited, $35 is paid upfront and then $20 a month
- for each SH Marketing member recruited, $20 is paid upfront and then $10 a month
Residual Matrix Commissions
Residual matrix commissions in Savings Highway revolve around a 2×15 matrix compensation structure.
A 2×15 matrix places a member at the top of the structure, with two legs branching out from under them (level 1).
In turn these two legs branch out into another two legs (level 2) and so on and so forth down 15 levels.
As a Savings Highway member fills their matrix, either via direct recruitment or the recruiting efforts of their up and downlines, they are paid a monthly commission.
How much of a commission a member received depends on their own Savings Highway membership level (see “Joining Savings Highway” section of this review), and what level recruited members are placed in their matrix.
Note that the Savings Highway compensation plan doesn’t go into the specifics of how much is paid out on each level per member, they only refer to “averages”.
- Ultimate Members earn “an average of $10 per member on levels 1-8 and $2 on levels 9-15“
- Family Super Savers earn “an average of $5 per member on levels 1-8 and $2 on levels 9-15“
- SH Marketing Members earn “an average of $3 per member on levels 1-8 and $1 on levels 9-15“
Note that Free Members are unable to earn via the matrix and that for paid members a minimum of two personally recruited paid members are required to qualify for matrix commissions.
Matrix Matching Bonus
If a Savings Highway member has recruited seven Ultimate Members and is an Ultimate Member themselves, they qualify to earn a 100% matching bonus on the matrix earnings of every member they personally recruit.
Gas Recruitment Bonus
Savings Highway members who sign up a new Ultimate Member are given a $25 Visa gas card. A maximum of $200 a month can be redeemed via these cards.
Vacation Recruitment Bonus
Savings Highway members who sign up three Ultimate Members are rewarded with a “$1,000 Value Condo Vacation for 7-days and 7-nights”.
Members must pay $50 to redeem this bonus and their travel expenses, with Savings Highway claiming they’ll “take care of your room and taxes“.
Car Bonus
If a Savings Highway member has ten active Ultimate Members and has a downline of at least 100 Ultimate Members (counted down ten levels of recruitment), they qualify for Savings Highway’s Car Bonus.
The Car Bonus is paid out as a $500 monthly bonus.
My Store Income
Bundled with membership to Savings Highway is a shopping portal members can earn commissions from (selling products and services offered by third-party vendors).
I had a look at a few affiliate’s stores and apart from some mosquito repellant tabs, all that was offered was the same third-party vendor services bundled with Savings Highway membership.
Joining Savings Highway
Membership to Savings Highway is available at four price points:
- Free Membership (no matrix commissions)
- SH Marketing – $39.99 a month (matrix commissions capped at $33,000 a month)
- Super Savers – $69.99 a month (matrix commissions capped at $66,000 a month)
- Ultimate – $149.99 a month (matrix commissions capped at $135,000 a month)
Apart from Free Members being locked out of matrix commissions, the main difference between the four membership levels is the amount of services access is provided to and the cap on matrix earnings.
Conclusion
I’m not going to comment on the establishing of Savings Highway, as I think the letter sent out by Robert Bowen speaks for itself. That and given this all happened now nearly six years ago, I’d like to hope the parties involved learnt from the experience and have moved on.
With that out of the way, here’s my rundown of the Savings Highway opportunity as it stands today.
Curiously, Savings Highway state in their Terms and Conditions that the company “does not pay commissions for referring, recruiting or sponsoring“. Yet with membership being the only thing sellable via the company itself, this is precisely what the company’s members are paid to do.
As per Savings Highway’s Privacy Policy:
Savings Highway pays commissions to our Independent Representatives based on the sale of our memberships and other products and services.
The “other products and services” the company mentions I believe are the store commissions, however these are again third-party vendor products (who pay Savings Highway who then pay their members).
What you’re ultimately left with is a scheme that primarily pays out on the recruitment of new members and conditionally upon their payment of monthly membership fees. These fees make up 100% of the commissions paid out upon the recruitment of new members and via the offered matrix commissions.
As per Savings Highway’s refund policy:
Savings Highway does not offer refunds for any reason and all Members agree to this upon joining when checking the Terms and Conditions Box.
Once a new or recurring Subscription is processed, commissions are paid to the upline and benefits are purchased. If a member chooses not to activate or use any services, that is up to said member. All sales are final.
Also note the line “if a member chooses not to activate or use any services, that is up to said member“, as what this is effectively suggesting is that the services membership provides access are by and large irrelevant to the compensation plan and commissions paid out.
You can join Savings Highway, completely ignore the “benefits” membership provides access to and just focus on the recruitment of others. Preferably with much of the compensation locked up or tied into the recruitment of “Ultimate Members”, this the level members are encouraged to recruit new members at. Or in other words, the more you pay the more you earn.
At the end of the day the entire Savings Highway scheme hinges on the recruitment of new members by those newly recruited, and the ongoing monthly membership fees paid by existing members.
The notion that mosquito repellant sales will keep people paying $149.99 a month (remember, we’re looking at Savings Highway as an income opportunity), is quite simply put, ridiculous.
That said, it’s not impossible so I’d advise those approached to join Savings Highway to get in contact with their potential upline and see where their commissions are being paid.
If it’s largely from membership fees then you can be sure you yourself aren’t going to earn anything without the recruitment of new members. The alternative could hint at legitimacy in the shopping portal but I’d be extremely surprised if that was the case.
99.9% of the time when a shopping portal is included in an MLM opportunity but has nothing to do with the compensation plan, it’s to try to mask the glaring recruitment commissions on offer.
Given the extremely recruitment focused Savings Highway compensation plan, I’m not seeing any different here.
This is basically a retread of FHTM (Fortune Hi-tech Marketing), which sells everything from satellite TV to roof insulation to magazines and whatnot, but really pays on recruitment. There’s a reason why FHTM was under investigation by multiple US States. So, how similar is this “savings highway” to FHTM? Answer that question for yourself. 🙂
http://www.katv.com/story/20010035/fhtm-opportunity
I know Steve Gresham well and worked for Better Universe corporate. I feel it necessary to speak up on his behalf, because he would rather not engage in mudslinging.
Better Universe failed mainly because we had 3rd party vendors who assured us they could provide technological and marketing services and it turned out they could not, even though they had some evidence or indication that they could.
Mr. Bowen failed to fulfill many obligations to the representatives that Steve had asked him to do. Mr. Bowen assured him he would do those things but did not. Steve resigned from the company after Mr. Bowen would not communicate directly with him or the staff for several months. Mr. Bowen did not attend any of our regular staff meetings in that time.
Mr. Bowen was CFO and full partner at Better Universe, and had complete control of all accounts. Steve was denied access by Mr. Bowen to even audit the accounts. Mr. Bowen then proceeded to pin all of the debt of the company on Steve, which he paid off himself.
I, and the other staff members, submitted documents testifying to the actions of Mr. Bowen to support all of this. Steve chose to take the high road and not defame Mr. Bowen publicly; he saw no positive result from that.
The letter from Mr. Bowen is full of lies, I can find no nicer way to put it. People who lie will always try to cover their tracks with more lies.
Unfortunately, Better Universe failed, but Steve was determined to create the best network company in the world. So, if you want to judge Steve Gresham, look at the solid track record of Savings Highway for the last six years.
This article is claiming that Savings Highway does not have a legitimate product or service offering. A membership is a product, just look at AAA or AARP. AAA does not own the trucks that help you out, their subcontractors do.
A Savings Highway membership has tremendous value for those who utilize it. You can join Ameriplan, or similar companies, to get discounts on health services; if you don’t use it, did that company do something wrong? I think not.
People are saving thousands of dollars a year using Savings Highway’s included services, and the company is continually adding more venefit to the membership. You will not know this until you are a member and use the savings programs.
Savings Highway is an innovative business model which is helping people save and earn more in these tough times. The author of this site also calls attention to the fact that they are incorporated in Delaware, this is perfectly legal and very common among businesses, it is listed at the bottom of the Savings Highway website.
There are people who are attempting to defame Mr. Gresham and Savings Highway, by bringing up this one deceitful letter from Mr. Bowen from 6 years ago, and 2 complaints on BBB (actually the BBB just removed one because it was someone who was never a customer, the other was resolved, they will be changing the negative rating soon).
These people are disappointed because some of their great leaders decided to join Savings Highway, because they saw a lot of integrity and potential in the company. That was the independent decision of those leaders, not an evil plan by Steve Gresham.
If you want to know about Steve, go to SavingsHighway.com and request he contact you, he would be happy to speak with you. He is the most accessible CEO in the industry. He is not afraid to put his face behind his company.
I do not know who runs this site, I assume they have the best intentions to help people, but it seems they have the luxury of remaining anonymous. We will see how impartial this site is and whether my comments stay posted.
Focus on the positives in life!
Not in MLM it isn’t. If membership is your product and you’re paying out on multiple levels directly on the acquisition of new members, you’re running a pyramid scheme.
End of story.
Your rebuttals to Bowen’s letter sounds very he says/she says. All I know is that Bowen put out the email in an official capicty and it was never formally challenged.
Furthermore the timing of the setting up of Savings Highway strongly supports Bowen’s allegations. That said all we have is one on-the-record detailing of events and your third-party rebuttal.
Readers can make of that what they will.
Hi Oz, thank you for posting my comments, it shows great integrity on your part. I realize it is a he says/she says situation, that is why Steve never engaged in disputing it.
Bowen’s letter was sent out to the field after Steve had to resign. He did not email the members to argue it because had to leave the company and ceased communication to the Better Universe member list. Incidentally, Mr. Bowen solicited the member list a number of times, and actually entered the members into MyWorldPlus and Isagenix without their consent.
Yes, Steve immediately began setting up Savings Highway because he is an entrepreneur and wanted to realize his vision without an uncompliant partner polluting things. He takes full responsibility for all matters related to Savings Highway. There is nothing wrong with starting a new business after one fails, that is what determined and successful people do.
Also, the membership in Savings Highway is not the only product, there are physical, digtal and travel products available now, and the company is working on integrating many more as we speak. It is a huge undertaking integrating all of these systems and products.
I have used the great roadside service a couple times, and many members have saved a lot from our health, surgical, prescription and dental network providers, as well as huge discounts on condo vacations.
Thank you for providing this dialogue. One day I hope that you will find it unnecessary to keep posted the unsubstantiated, unproven claims by Mr. Bowen, and evaluate Steve and Savings Highway on their own merits.
Keep up the good work. We look forward to winning you over one day!
If it adds something to the discussion it gets published.
Again, membership is not a product in MLM. As for the other products, as I saw it they had nothing to do with the current compensaton plan. Savings Highway members are only paid upon the recruitment of new members and ongoing payment of membership fees.
This as it stands is the textbook definition of a pyramid scheme.
The company does pay commissions on store and item sales, and these offerings are about to be greatly expanded.
Thanks for the discourse.
@Karl
From memory those are third-party products provided by third-party vendors. The company Savings Highway itself only sells membership.
First things first. I regularly review the articles and comments on here to help me evaluate various programs out there in MLM. I have mixed feelings about MLM, but nevertheless I have continued to pursue them in hopes I find ethical and legit opportunities.
My mind is still not made up about this industry, but I have some hope that Savings Highway may be a uniquely different in a good way. I will find out in time. Having stated that…
I learned about Savings Highway a couple weeks ago after first learning about a partner marketing program called TeamVinh which just launched a few days ago.
For about $240, TeamVinh’s role is to build a person’s downline. They have specifically partnered with Savings Highway to do all of the marketing and selling for people who join TeamVinh and then subsequently Savings Highway at the Ultimate Membership level.
I am hopeful this will be rewarding, but only time will tell. I will gladly come back here and post about that in the future if you feel this is any value to readers on here.
As a side note, I am not a legal expert and don’t pretend to know what creates red flags in the MLM industry for the SEC, FTC, or other regulatory organizations in the USA. Getting clarity on what is a legal downline, matrix, referral system, or sponsorship, would probably be most helpful.
Perhaps this is the challenge for the regulatory organizations as well. I suppose they have to look at each one and decide over time whether it’s a pyramid or ponzi, or whether it’s a legit system.
Any clear cut steps to help readers sort this out is valuable. I sense that this is one of the purposes of this website. Thank you!
You sound altogether focused on recruitment and increasing your downline, with no products being sold or marketed.
In MLM membership alone is not a product.
Regulatory agencies just use common sense in analysis of business models, the same as I try to do here. If it’s a membership scheme with no products being sold at a retail level, there’s a red flag.
Oz,
I am very focused on recruitment and increasing my downline as you pointed out. And for me this is not mutually exclusive from my focus on products and services. Most of the MLM programs that go on to be highly successful and having staying power seem to me to have a good measure of high quality products/services as well as a good compensation plan for distributors.
I think the service offerings of Savings Highway look to be rich in value for their members. Whether these services are outsourced or not doesn’t matter to me if they are valuable services to me and to those who I seek to serve by referring to the program.
If I understand you correctly, membership which connects people to these services is a red flag for being a pyramid. By pyramid, I think you are saying this is illegal and therefore will be shut down by government regulatory agencies in time.
Companies that offer services in an MLM format that I am aware of are My World Plus and Lyoness. So far these other groups have been around for several years and have not yet been shut down. Savings Highway offers a larger array of membership services, but that would seem to bode well for survival and acceptance.
Also, they offer at least some of these services to consumers who are not seeking to become distributors.
Also, as pointed out by Mr. Bolz, there are non MLM organizations across the globe who provide membership services, including AAA which he mentioned. So if regulatory agencies are just using common sense as you purported, there is either a double standard or there’s more to it than this.
Please elaborate further. What makes an MLM an illegal pyramid? What is their common sense test?
The reason for this is because that’s all your paid for doing in Savings Highway, selling memberships.
In MLM you should be focused on selling a product to retail customers. Membership is obviously not a retail product and therein lies the problem.
Well it should. If a MLM company only offers membership, it’s a pyramid scheme.
No, it’s the fact that you are only paid a commission for selling membership. Those third-party services, specifically the use of them, is non-commissionable within the Savings Highway compensation plan itself.
What the authorities do or don’t do isn’t my concern. All I’m interested in is analysis of the company’s busines model.
Yes, non-MLM companies. When you throw MLM into the equation that’s when pyramid scheme concerns arise.
It’s quite simple, if in an MLM company and you’re earning all or most of your commissions from signing other people up to the company, you’re in a pyramid scheme.
The question you should ask is… what makes MLM a “legal” pyramid scheme? There’s only one difference.
That’s the ONLY difference.
As you concentrate on recruitment, you’ve already made the “lean” toward pyramid scheme.
Oz & K.Chang,
Again, I appreciate your enlightenment on this topic. Your last comments are starting to sink in. I may not be the sharpest tool in the shed, but I will keep at until it fully clicks for me.
Using your example with Amway as the standard for acceptable MLMs…
You are saying that if a MLM company partners with and sells 3rd party discounts which are likely based on volume purchases, that constitutes recruitment, not “sales”. And this is because a distributor recruited a person who is buying a membership to these discounted services as opposed to selling them a discount merchant card.
If the sale was a discount merchant card rather than a membership program in an MLM, this would be legit? What does an MLM company who wants to offer services and simultaneously meet the FTC standard have to do?
Or do you know of an MLM program out there that does this already that I could research further? Or is it categorically impossible to meet the FTC standard as an MLM if you don’t sell a physical product like vitamins or pickles or perfume, etc.
No, the selling of membership constitutes recruitment.
If those third party sales are not part of the MLM companies compensation plan, they are then also irrelevant.
Eg. You sign up to MLM company A, who provide you access to third-party products via Company B. If you buy or sell anything through company B, you are paid by company B (or Company B pays Company A through an affiliate agreement who then pay you).
Either way, all Company A are doing is selling memberships, making it a pyramid scheme.
A merchant card isn’t a product, it’s membership that provides access to something (discounts). If that’s all that’s being sold (ie the merchant the discounts are applicable to is a third party), then yes it’s still a pyramid scheme.
I’m not concerned about the FTC, but my answer would be seperate those services from company (affiliate) membership (ie. offer them on a retail level to retail customers) and pay out commissions on the actual use of those services and/or purchase of product themselves.
If it’s possible to set up an endless chain recruiting system within a MLM, then the company is both illegal and guaranteed to fail.
For example “you” only recruit.
Your recruits only recruit people who only recruit other people and so on down the line ad infinitum
If such a scenario is possible, in that a member is able to make the greater proportion of any “earnings” solely by recruiting, AND the company itself has no strategy in place to prevent it happening, you are looking down the barrel of legal intervention and, more importantly from potential members viewpoint, at guaranteed failure of the MLM company.
“recruitment saturation” is probably more important to the new MLMer than market saturation of the product.
After all, it’s not Amway, is it? is now many people’s immediate response to the word “opportunity”
I’ll have to stop you right here, because what you’re describing is NOT MLM, but a “buying club”, such as CostCo, where it buys things in bulk, and pass on the savings to the members, who pays a small fee for administrative purposes only.
There are separate laws governing buying clubs. You don’t join a buying club to make money, only to SAVE money. Furthermore, it requires state-by-state registration, and some even require posting of bonds, record-keeping requirements, and so on.
I recommend you read my short summary on it:
http://amlmskeptic.blogspot.com/2012/10/mlm-basic-what-is-buying-club-and-why.html
The question you need to ask here is… would you BUY a discount? Or is that an oxymoron? I know you’ve been exposed to the marketing language, but engage some critical thinking and examine it from a different point of view.
Let’s take CostCo for example. Does Costco take referrals? Yes, but only $10 bonus (both referrer and referee), and limited to 2 a year. You’d think they be HUNGRY for new members? Nope. That doesn’t even cover cost of basic membership.
You are NOT supposed to make money selling discount “cards” or whatever, that simply give you “access” to discounts. They are like coupons: no cash value.
So where are they getting the money to pay you? Or put it another way, “who benefits”?
Last week some high school students knocked on my door and sold me a discount card for a pizza store. So I bought a discount and they made money. But I suppose that since they don’t have a downline, this was legit.
I have read all of the explanations a few times from you who have contributed to this topic. I have to be honest. There seems to be enough confusion about what is a pyramid vs. a legit MLM that it’s too difficult to determine.
It comes down to the attorneys involved to sort it out while the rest of us hope we are on the right side of the law. I am no closer to knowing whether Savings Highway’s business and comp plan are going to have intensive governmental scrutiny or not.
If you look at most non MLM corporations, they are designed much like MLMs. The top management in companies are like the 1% who make a killing in MLM. The employees of most corporations are somewhere at the bottom and provide the living for the people at the top. If you want to make it to the top, you have to do successful work and promote yourself. This is the same in MLMs.
MLMs at least offer autonomy and a way to help others rise to the top with you. It has its flaws, no doubt. But the MLM model is attracting tons of people from corporate jobs because their model offers a more attractive life, career, and financial opportunity.
But if you are not successful in MLM, instead of demotions, bonus restrictions, and firings, you simply make less money or possibly lose money if your are spending more than you make.
Your BehindMLM team seems to dislike MLMs. I don’t like how some people promote MLMs myself. I especially don’t like going to family and friends and recruiting that way. But I do like promoting them through marketing channels that brings interested people to me.
I search for the people who are searching for a home based business. This to me feels like a good benefit to people seeking some quality products/services with an opportunity to build and create a home biz.
I seek to be ethical and play by the fair rules established by the FTC and SEC and any other governmental body involved in fair business practices. And yet, the rules are not clear and they don’t seem to be universal across the business world. In fact, I believe their power is abused and misused. But that’s another can of worms.
I appreciate your efforts to help me out here. However, I still don’t have the clarity I seek.
Correct, there’s enough of a gray area that is extremely high risk, and the scammers know it by launching “pseudo-MLMs” that looks like MLM, but are pyramid schemes to troll the muddy waters for victims. And the regular MLM industry, in fear of exposing this gray area, is doing almost nothing about it.
Kevin “The MLM Attorney” Thompson discussed this on his blog a while back:
http://themlmattorney.com/self-deception-a-cancer-holding-the-mlm-industry-back/
I don’t hate MLMs. In fact, a couple MLM haters accused me of being a MLM sympathizer, I kid you not, and banned me from making comments on their blog when I pointed out flaws in their thinking.
I believe what Oz and I hate are the pseudo-MLMs that shows some FUNDAMENTAL LACK OF UNDERSTANDING on what is legal and what is not legal.
I actually addressed this in another one of my blogposts:
http://amlmskeptic.blogspot.com/2012/10/why-do-so-many-mlmers-completely-ignore.html
Why do you need to any further than this ???
Multi Level Marketing is only ever LIKE any other form of “business”
Just as a Volkswagen is LIKE a Porsche, In theory, there are many similarities, BUT it’s the differences which make them completely “unlike” in reality.
Forget for a moment using the term “pyramid” to describe a business, MLM or not MLM.
Think instead of the “endless chain” recruitment component of ANY business being both the illegal and guaranteed to fail portion.
It’s the fact a “member” can make the greater percentage of his/her income by recruiting which makes an MLM illegal in the eyes of the law, and, more importantly for prospective recruits, guaranteed to fail long before the product itself reaches a market saturation level.
It’s the “possibility” for members to recruit others who recruit others WITHOUT selling a matching amount of “product” which makes an “MLM” into an endless chain recruiting fraud.
Forget about “legal” or “illegal”
In practical terms, it’s unlikely the FTC or any other body is going to single out one of the hundreds of thousands of “endless chain” recruitment based pseudo MLMs before it collapses under the weight of its’ own structure.
From a potential recruits’ point of view, just the fact “endless chain recruiting” exists within the company AND there is no strategy in place to prevent it from happening should be enough to raise major red flags.
@Suzanne
This is not something I take into consideration when reviewing a company’s business model. I’m primarily evaluating their business model.
If they’re only selling memberships, it’s a pyramid scheme. What the authorities do or don’t do is entirely up to them.
Given this, I’m not surprised you still don’t have clarity. Sounds like you need to get in touch with the authorities (who won’t tell you anything specific, as they don’t sign off on companies).
Except that they aren’t MLMs, and thus are entirely irrelevant. The end result does not justify the means. Recruitment being the means here is of relevance.
This is (along with “everything is a pyramid scheme” as above) is a common reply to those who disagree with any red flags brought up about the companies they are in on here, with nothing more than “I disagree”.
At the end of the day Savings Highway sell nothing more than memberships, meaning this is all they themselves pay commissions out on, paid out on multiple levels. Or in other words, the precise definition of a pyramid scheme (there is no ambiguity or grey area in this respect).
Without MLM there is no “BehindMLM” so to assert that I hate MLM is rather silly. I approach every MLM company review with an open mind and it is only after research and analysis of a business model that any opinions and/or conclusions are formed.
@Karl
You are making a fallacy of sweeping generalization. That is, you are assuming that a ‘membership’ is the same regardless of the situation.
It is true that many ‘pyramid schemes’ and ‘money games’ have a ‘membership.’ Membership in the cases you refer to was only signing up at their website, and had no other value.
A Savings Highway membership is an altogether different entity, with value to the consumer. It is on par with memberships you would subscribe to at AAA, AARP or Ameriplan. The company is in the process of rolling out multiple consumer options for our broad range of service packs as well. There are also unique technology products in queue to be rolled out.
You say that Savings Highway sell nothing more than memberships. This is not an accurate statement, so that is misleading.
We are in a new age of business, where digital products, online services, rebranding, reselling have created new opportunities. 20 years ago no one could have envisioned a Google, or Facebook. So the pioneers of business must push ahead with their vision.
Savings Highway is on the right path to be the model of quality in the MLM industry.
Totally irrelevant to the discussion at hand.
It has nothing whatsoever to do with “membership”
It is entirely to do with the fact it’s possible to be paid for recruiting members who recruit members.
Despite what you or others may think, the law and it’s administrators are not completely stupid.
A “nudge, nudge, wink, win here, buy an overpriced, unsalable product to get around the laws, then recruit, recruit, recruit” approach to the regulations just doesn’t cut it in the real world.
Again I say, forget the “laws”
Savvy consumers know any form of “endless chain recruiting” is bound to fail.
Not necessarily in the short term, but, DEFINITELY in the longer term.
Look up “the legend of the chessboard” for an easy to understand explanation of why “endless chain recruitment” schemes are illegal.
You can “beat” bloggers, but, you sure as h*** can’t beat mathematics.
Nope. It is only after analysis reveals that membership is all that is being sold and paid commissions out on in an MLM company that the conclusion it is a pyramid scheme is drawn.
Adding products to membership in MLM does not change the fact that you are still ultimately selling membership and paying commissions solely on the recruitment of new members and/or ongoing membership fees of existing members.
Membership alone is not a viable product in MLM, primarily because there is nothing being offered at a retail level. Yes, you actually have to sell products to retail customers in MLM to be legit.
Bundling products with membership is an age-old trick by pyramid scheme operators to appear legitimate and doesn’t change the commissions structure or where and how revenue is generated.
Well, until that happens and the majority of revenue coming into the company is from these streams (non-affiliate money), Savings Highway is a pyramid scheme.
Actually, no. Savings Highway membership only gives you ACCESS to those discounts, as they are ALL offered by 3rd party vendors (with their own costs).
Ask this VERY SIMPLE question: are you selling the services individually? (sort of like FHTM, which is another suspicious scheme under investigation in various states) Or are you simply selling Savings Highway membership?
Oz,
When I said your team seems to dislike MLMs, I was not seeking to be disagreeable or contentious. Howevre, you painted me with a wide brush as someone who can only disagree without reason. You also said I think you hate MLMs and that I am silly.
I think you misunderstand me. I may not agree with everything your team has said, but my mind is not made up and I am sorting it all out. I have been very open to understanding and learning your point of view.
I will freely admit that the concept of Savings Highway, especially with the partnership of TeamVinh’s marketing power seems very exciting to me. But if I find out for myself that there are ethics and/or legal violations, I will drop out of this program.
I am curious about your authority in this field. Is anyone on your team an attorney or hold some credible certification that allows you to speak so boldly and confidently? Please manifest your credentials.
Otherwise, we are all in the same boat to determine for ourselves what is right and wrong until governmental regulators step in to decide legitimacy.
I want to reiterate that I think you provide value to readers. Having said that, since your opinions come across quite strong and authoritative on here, this is why I want to know your backgrounds on MLM business and legal matters.
Thank you!
K. Chang,
Just a quick follow up. I read your links posted above and found this to be very helpful because they are in essence legal summaries. So thank you for directing me to the links!
Thanks, and I commend you in your willingness to learn what truly is legal (or illegal) in MLM. Seems many people are just caught up in the fervor, law shmaw, who cares and all that.
Got a 19-yr old kid over in a different topic here that basically accused us of being simple-minded “employees” trying to hold him back. 😀 Even though we tried to explain the legal raminifications. It apparently went in one ear and out the other.
@Suzanne
This is irrelevant. My analysis is based on common sense and the core principle of following the money.
I’m just a guy with a keyboard…
You don’t have to agree with the fact that you are solely being paid to recruit new members in Savings Highway, but facts are facts.
@Suzanne — you have to keep in mind that for a moment you sound just like those “deniers” who refused to see the warning signs in their own schemes. 🙂
I have no reason to doubt that you met some very enthusiastic people that may teach you something about marketing. However, enthusiasm alone does not make a business, nor does the product alone. It’s a synergy among product, people, legal, marketing, and various other factors, plus a dash of luck.
Thanks again BehindMLM team. You have helped me gain some clarity. Now I am seeing a strong focus from Savings Highway to promote the discount opportunities to people who don’t want to join the biz side. From our exchanges here, that seems to be a good sign.
I realize this is just one aspect as I continue to evaluate their model.
Just had a look at the site again and the only thing you earn commissions on from Savings Highway itself is by signing people up to the opportunity.
Not sure what you’re talking about…
@Suzanne — merely promoting the discount side wouldn’t satisfy the regulators when the discount is “joined at the hip” with the income opportunity. I recommend you take a look at my “Burnlounge” summary.
Burnlounge is a music e-retailer in the US that was shut down by the FTC in 2008 for being a pyramid scheme. They have virtually no separation between regular member and those making income. The result is people just sell membership to other people, not music, and thus, it was shut down.
If there is no separation between the discounts that SH was selling, and the SH membership itself, than SH is “heading down the same road” as Burnlounge.
Here’s another warning sign… do they have a MLM consultant/attorney who vetted their comp plan? (not that having one is necessarily makes it safe… just look at Zeek Rewards)
http://amlmskeptic.blogspot.com/2012/09/scam-study-burnlounge.html
Oz,
On the SH website, any person can sign up as a free member to get access to their discounted programs. When a free member or a paid business member buys products in these various services, there are commissions earned and paid to the business member who referred them.
K. Chang,
I am looking into their vetting process with attorneys/consultants. This is good advice to check out.
Thanks again!
That’s not retail, and it’s still signing up.
Furthermore if you can sign up for free, why have paid membership (other than to pay commissions upon the recruitment of other paid members)?
These are all third-party services and products. Commissions would be paid to Savings Highway via an affiliate agreement, who then pay you. As far as Savings Highway itself goes, the only commissionable “product” they offer is paid membership.
Here’s a couple links out there I came across while researching in case this adds any value to our discussion:
http://mlmia.com/benefits/articles-archives/91-mlmia-legal-mentoring-series-what-is-mlm-and-what-is-a-pyramid
http://www.mlmlegal.com/pyramidyn.html
Some of this makes SH look good and other parts not so good. As you have stated, it’s a good sign to have your own product.
If you are going to offer services, you are probably a safer bet for being considered legal if you have developed your own shopping site for members instead of offering 3rd party programs.
The fact that SH has been doing this for 6 years and several other MLMs out there even longer in this specific discount membership and shopping niche makes me simply wonder if this creates a precedent that says this is a legal structure.
Until one of the governmental agencies comes out and says otherwise, it’s more or less buyer/distributor beware.
I must say this is a frustrating study. Obviously, from a legal standpoint, the easy choice is to stay out of MLMs altogether. But easy isn’t necessarily the best thing either.
I think we can agree that some MLMs provide great value to members and consumers. I still don’t feel confident enough to rule in our out SH. More work to be done…
is irrelevant.
What is relevant is the business model. Analysis of said business model shows membership is the only commissionable “product” in Savings Highway.
That’s pretty much your answer right there. Sadly the authorities are largely reactive in the MLM world, meaning unless a company gets big enough they usually don’t attract attention.
In any case all I do is analyse a business model and point out any red flags I see. MLM companies have gone down in the past for offering nothing but membership so it’s not like this is uncharted territory.
If everyone reading this took the same “wait until a government acts” strategy to heart, can you imagine where we’d all be within a very short period of time ??
It’s not that your own shopping vs. someone else’s shopping, it’s more like are you really selling the products or services, instead of your own membership, and what exactly are you getting paid on. In Amway, NuSkin, and such, membership kits are at minimal cost (usually $20-25 at most) and it’s the products that need to be ordered and sold. When you don’t even have your own products, makes one wonder WHAT exactly is the membership for.
And as Oz said, there needs to be “ultimate consumer”. If every member is an affiliate, and every affiliate is a member, then you have NO separation, thus you look like a pyramid scheme.
Or as a MLM attorney once said, if you quack like a duck, and waddle like a duck, you’ll be SHOT like a duck, even if you insist you’re something else!
Not necessarily. I suggest you again, look up FHTM, and Burnlounge. Burnlounge have NO separation between retail and member, while FHTM was sued out of multiple states.
Personally, the lesson to learn is stay away from the MLMs that sell membership, and stay with those that actually sell PRODUCTS.
I recently signed up with Savings Highway. So far experience isn’t as good as I expected it to be. I first heard about them through Team Vinh, which I also invested in.
Just to get started, be prepared to spend a hefty price for memberships. For Team Vinh you need to purchase 2 VPak (personal referrals) for $99 each Then it’ll cost another $39.99 for the membership itself. Savings Highway will set you back $150 for the membership.
Every week Steve Gresham has webinars to update members on what’s going on. So far, all I’ve heard are empty promises. I have not yet been paid a penny. I don’t think anyone who has the ultimate mebership has yet.
We were told that the first monthly payment wouldn’t affect anyone until commission were paid. I can’t go to my back office unless I pay the $150 I was told I wouldn’t have to woory about. I invested the last of whatever money I had in these 2 companies hoping to make a profit.
The “products or services” sold are ones you can find anywhere except not as good. I signed for a wellness card which is suppose to give you discounts on any dental, medical or vision plans. You don’t get an actual card, you get a picture of a card with your name on it and have to print it out and use it like that.
I’m going to give this another week or so and if nothing improves, I will just take it at a lost and let Steve Gresham know what a disappointment he created.
Having read the transcript of this thread in its entirety, I find it amusing to consider that it is legal for a company to charge for a membership for 3rd party goods and/or services, so long as they do not share the proceeds with(or distribute them to) its members!
Ultimately, it is up to one to decide whether the cost of a membership is worth it–or not–for those goods/services. I see it completely differently. We are paid commissions to advertise the company, and by joining, have agreed to share some of the proceeds to up to 15 people.
I have no problem with that, as long as I can receive more in potential savings than the cost of my membership. Were I not to avail myself of the goods/services, that is strictly my option. Not the fault of the company, who has provided a convenient portal for them.
Without the MLM side of things this is a single-level affiliate agreement between the company and the third-party. Do you also find it amusing that it’s legal for supermarkets to sell third-party products without the whole pyramid scheme attachment?
You can try and wordsmith it any way you want. When members are funding an MLM company via membership fees with no products being sold to retail customers it’s a pyramid scheme.
That’s a bit of a worry.
Perhaps you’re confusing a “buyer’s club” vs. “MLM”?
In buyer’s club, the purpose of the club is to save the member’s money through purchase power, not to give $$$ back to the members directly. MLM, on the other hand, is a way to market products (and pay commission) to its members/affilaites for selling the products.
When you mix the two together, you very often get a pyramid scheme.
Just want to thank Oz and K Chang. I was looking at Team Vinh and Savings Highway as a possible way of extra income. However after reading the full thread my eyes are now wide open.
I can speak from experience on this as I was originally involved in the whole Zeek Rewards scheme and got stung ! Thanks folks….the more people that learn about these scams the better.
this is so typical of the whole pyramid scam thing,those who have money in have to talk up positive to save the whole thing crashing.
this things been going on a long time and he still keeps talking FT, wow its a long time to be in denial.
To be very honest with you Mr Oz. I have always viewed my selections like so. If the company has a good rating with BBB and is declared to be legally operated by the FTC, if its good enough for the powers that be to declare its existance legal, then it is certainly good enough for me.
The is no such thing as MLM with recruiting members for services, rather the service are directly of the company or the company is marketing services for a third party.
People are really hurting for an income in these difficult times and to trouble with information about a pyramid scheme or what may be the likes thereof is very unthoughtful, especially when you are using a from a previous business in which the writer and steve was involved to predicate your inquries on is not very tastful on your behalf.
It seems to me that the FTC is ok with the structure of savings highway and the are gaining a good reputation with the BBB as well.
So after reading your comments and acknowledge that you could very well be correct in your accessment, but if the big boys (FTC and BBB) say’s they are operating legally, whats your point?
Yeah so uh when did that happen again?
The FTC don’t sign off ony any MLM business. And as far as due diligence goes, the BBB doesn’t matter. Primarily one should be looking at an MLM company’s business model and following the money.
In that respect Savings Highway pay commission on the sale of memberships. Thus it needs a constant stream of new recruits in order to pay commissions (or those at the bottom stop paying their membership fees).
Spin it all you want son, facts are facts.
Yes better to leave them uninformed so you can earn a quick buck. Despicable.
Perhaps your criteria needs updating.
FTC does not declare any company to be “legally operating”. They will, however, shut down the really egregious “bad apples” that they got around to, such as FHTM, Equinox, and soon. Do you have any evidence of such a “declaration” by FTC that you hinted at?
Furthermore, BBB’s rating is based on how companies resolve complaints, not checking into their business model. Thus, if 10 customers complained that they’ve been tricked into joining a pyramid scheme and wanted refunds, and the company offered all 10 refunds, BBB’s rating of problem resolution would be 100%.
It neither proves nor disproves that the company’s business model is legal. It is irrelevant.
Thanks for your prompt and direct reply and I will respond by being just as direct. First of all I am not in any MLM company, so I don’t use these model’s to earn a quick buck.
And as I stated before their is no such thing as MLM without recruiting members through marketing services, rather it be that of the company’s or a third party.
Although I agree with you on the recruiting process being the dominant way money is made in such a business, it may not be the only way to earn an income in this system. So great post and point well taken.
Irrelevant in the light that others can and do profit on the due diligence failures and lack of awareness of others.
Whether there is or isn’t isn’t the point, it’s whether or not this is what affiliates are paid to do.
What you can and can’t do is irrelevant if affiliates are paid on the recruitment of new members. A pyramid scheme with a bunch of other stuff attached to it is still a pyramid scheme.
Hello ,can you do another Review of SavingsHighway as much has changed since 2012 , so much in fact you may be surprised and even have something favorable to say in an updated review.
The Savingshighway members are given many free membership benefits , and offered higher levels of benefits for paid memberships. Savingshighway has many cutting edge products to market today.
Has the compensation plan changed or is it still just about recruiting affiliates?
Hello Oz , the compensation plan and everything else has changed . In-fact so much has changed it renders the whole review (as far as SavingsHighway goes) inaccurate as it is no longer the company you reviewed Steve Gresham re-launched the company in the summer of last year.
I’will add that SavingsHighway was constantly evolving since I had become a member in 2013 . Frankly the opportunities to earn income by numerous businesses within the business are great.
One even has the ability to market any of the products Savingshighway has to offer as a free affiliate.
Paid membership is no longer a requirement for one to be eligible to earn commissions . Take a look at my web-site and see what SavingsHighway has to offer.
Therefore I feel Behind MlM is doing itself a terrible injustice as most people including myself rely on what gets reported here to be accurate.
The review is clearly date-stamped. Injustice my ass.
I’ll flag SavingsHighway for a review, but from the sounds of it they just added free affiliate membership and alternative qualifiers.
If the majority of affiliates are still self-qualifying via paid membership then the red-flags identified remain.
So uh, I just clicked over to the SavingsHighway website to bookmark it for review.
There’s nothing there except a box demanding I enter in an affiliate referral code, or login as an affiliate.
Looks like it’s become even more focused on affiliate recruitment (we won’t tell you anything unless you visit us with an affiliate referral code).
Hello OZ , this may help you see what you need to see , try this link (Ozedit: affiliate link removed), I hope this helps you.
I had sent you an email earlier for something in my aforementioned comment that people could possibly take out of context, and again I do apologize.
I was not insinuating that you were not being truthful in your review. I was only making note of the fact that the review you wrote in 2012 was no longer accurate, after all it is 2015 .
Why do I have to “try” to find out basic information about the company?
Quite obviously the focus on acquiring affiliates as you can’t get any information about the company without an affiliate referral code.
An MLM company website with little more than an affiliate referral code entry box is just not good enough. Like you said, it’s 2015.
I just wanted to state that no commissions are made by recruiting affiliates. Becoming an affiliate is free. There are no purchase requirements.
the company only wants people buying products if they want to, not because they have to.
Commissions are only made on products sales. That includes discounted membership plans, weight loss products, skin care products, solar energy, etc.. The company provides these products through partnerships.
Savings highway appears to be a platform that anyone can join for free and it connects companies to affiliates – each product can have a different payout structure.
For example the solar energy comp plan is very different than the comp plan for discounted membership plans. However, you qualify for commissions on all products by becoming a free affiliate.
You sell a product. You get paid.
Does this still put up some red flags
Affiliate membership to the MLM opportunity is not free.
If money spent on third-party services is unevenly weighed towards affiliates, then you’re being paid on recruitment.
It makes little sense to sign up to receive third-party discounts which can be accessed elsewhere, leaving the only realistic users of Savings Highway being affiliates paying monthly fees.
Said fees are tied to income potential through the MLM compensation plan, qualifying as recruitment commissions (there’s no other source(s) of revenue).
This is all ridiculous… Suzanne, E.A. Media Guy. This guys are just on here to disappoint those tying to build something with SH.
Memberships are optional first of all. Money can be made without one. Second, There is money in selling products within a membership or without. Recruiting is not needed at all to earn an income.
E.A, I was in Zeek Rewards as well. That was an unfortunate situation. Nobody truly knows whether bids were actually being sold or not outside of Zeek. So was it truly a scheme?
No one really know except those that didn’t or couldn’t say anything. Memberships are common in many MLM’s and Corporations… some with products being sold and some with none, but the real schemer’s are those like the SEC that wants everyone that earned over $1,000.00 in Zeek to pay it back.
Optional or not, the fact remains you can sell affiliate memberships and earn commissions – which is the hallmark of a recruitment-driven pyramid scheme.
Anything external to that is irrelevant.
Uh, the SEC released very specific data on this. 0.25% from memory (one quarter of a percentage) of retail bids were actually used. The rest were Ponzi investment points dumped to qualify for ROIs.
This is not up for debate, this is documented history.
Ah, so that explains your logic fail. Cry more scammer.
Tsk tsk tsk. Instead of pointing out inaccuracies you just flat out accused Oz of being a “sour grape”. Your ad hominem is so transparent. Is this the way you usually react to criticism?
“Those who think they know everything… will learn nothing.” — paraphrased from Epicetus, Greek Philosopher
I’ve followed this thread for some time now. Understanding both opinions making some interesting valid points about the differences in a model being a pyramid or not.
Some Companies truly want to be operating legal. And some make every attempt to.
I don’t totally agree that models that sell memberships, subscriptions etc are all pyramids. Word of mouth advertising is the most economical, and socially rewarding form of marketing it is.
Why can’t the people earn share income from “WOM” marketing instead of some “fat cat” advertising & marketing agency raking in all the money.
If i did know any better, i would think some people would love to see all direct marketing companies go away, fail. The market will correct itself.
Specifically with respect to MLM, if the majority of memberships are held by distributors/affiliates, then that company is operating as a pyramid scheme.
I have a membership in Costco.. what does that make them?
It makes them irrelevant. Costco isn’t an MLM opportunity.