Grocery Rewards Network Review: $150 recruitment scheme
Grocery Rewards Network launched in December 2014 and provide a contact address in the US state of New York on their website.
Further research reveals this address to be virtual office space rented from Regus:
Grocery Rewards Network would appear to exist in New York in name only.
Identified as the President of the company on the Grocery Rewards website is “Stephen G. Barr”.
Stephen G. Barr has a Harvard education background and is well experienced in the start up world.
He has sat on nearly 50 company boards and is one of the top 3% angel list investors.
This matches the information provided on Barr’s Facebook profile, where he identifies himself as being from New York but currently residing in California.
Given this, it’s likely that Grocery Rewards Network itself is in actuality being run out of California too.
Despite an extensive social media presence, I was unable to put together an MLM history for Barr.
Read on for a full review of the Grocery Rewards Network MLM business opportunity.
The Grocery Rewards Network Product Line
Grocery Rewards Network has no retailable products or services, with affiliates only able to market affiliate membership to the company itself ($150).
Bundled with Grocery Rewards Network affiliate membership is access to some sort of cashback program, the details of which are scarce.
In their FAQ, Grocery Rewards Network claim their affiliates
can continue to go to the favorite grocery store of your choice (and so long as you) enter your receipt in our exclusive online membership portal … you can redeem your affiliate grocery reward account once a month when it reaches $600.
This seems to contradict what is written elsewhere on the site (“membership” section):
You can purchase $250 a month in groceries from your favorite store and through our EXCLUSIVE membership receive back 10% in Grocery Rewards up to $300 per year!
Whether affiliates can generate $600 a month or $300 a year through grocery shopping is unclear.
Unfortunately no further specifics are provided as to how Grocery Rewards Network source this cashback money (the “terms” link on the website was disabled at the time of publication).
The Grocery Rewards Network Compensation Plan
Grocery Rewards Network pay affiliates to recruit new affiliates using a binary compensation structure.
A binary compensation structure places an affiliate at the top of a binary team, broken down into two sides (left and right):
From the top affiliate position, two positions emerge to make up the first level of the binary. Positions are then generated in multiples of two each level, down a theoretical infinite number of levels.
Positions in the binary represent recruited affiliates, either via direct recruitment or the recruiting efforts of an affiliate’s upline and downline.
Commissions are paid whenever a new pair of recruited affiliates are matched on either side of the binary (one on each side).
When this happens, Grocery Rewards Network pays out a $20 commission, with affiliates able to earn up to $3000 a day (150 new affiliates on both sides of the binary).
Binary commissions are calculated daily, with positions in the binary only able to be matched once.
Joining The Grocery Rewards Network
Affiliate membership with the Grocery Rewards Network is $150.
With nothing being marketed to retail customers and all commissions paid on the recruitment of new affiliates, Grocery Rewards Network fits the definition of a recruitment-driven pyramid scheme.
Affiliates buy in for $150 and are then paid to recruit new affiliates who do the same.
The grocery side of the business is superficial, with use of the cashback network having nothing to do with the MLM side of the business (through which commissions are only paid on recruitment of new affiliates).
That aside, I don’t really understand where Grocery Rewards Network are getting the funds to pay their cashback from.
The only money flowing into the business is from affiliate fees, which when you discount recruitment commissions (remember a newly recruited affiliate can appear in multiple affiliate’s binary’s to generate a pair), doesn’t leave much left. Certainly not enough to cover hundreds of dollars in cashback.
Infact with their seemingly being no restrictions on where affiliates can shop, and only the recording of the receipt mattering, I’m pretty sure there’s something suss going on here.
Due to the lack of information provided by Grocery Rewards Network however, there’s not enough information provided to put together an accurate picture of their cashback.
Regardless, it’s a moot point in light of the MLM opportunity itself having nothing to do with it.
As with all pyramid schemes, once affiliate recruitment slows down so too will the recruitment commissions paid out.
At $150 to sign up, an affiliate will need to fill 16 positions in their binary just to break even.
Anyone who doesn’t achieve that once the post-launch recruitment frenzy dies down will of course be left holding the bag.