Paid 2 Save Review v2.0: Travel discounts with pay to play

BehindMLM first reviewed Paid 2 Save in April, 2013. Back then the company paired a “discount card program” with an MLM compensation plan.

From a regulatory standpoint, Paid 2 Save had no actual products of their own and were simply selling access to third-party discounts.

Last month it was announced Paid 2 Save would be rebooting, complete with a new prelaunch.

Today we take a look at Paid 2 Save and review the company’s new offering.

The Paid 2 Save Product Line

Paid 2 Save appear to have scrapped their initial general discounts card in favor of access to a third-party travel discount portal.

Paid 2 Save do not disclose who the supplier of their travel discount portal is.

Access to the Paid 2 Save travel discount portal is $12.95 a month.

Free access to a discount portal is also available through a Paid 2 Save branded mobile app.

The Paid 2 Save Compensation Plan

The Paid 2 Save compensation plan pays affiliates to sell travel discount memberships to retail customers.

Affiliates are also paid based on group volume, which is a monthly fixed amount on top of performance bonuses.

Paid 2 Save Affiliate Ranks

There are fourteen affiliate ranks within the Paid 2 Save compensation plan.

Along with their respective qualification criteria they are as follows:

• Partner – sign up as a Paid 2 Save affiliate for $125 a month
• Director – recruit and maintain three commission qualified affiliates and have three recruitment legs generating at $100 GV a month each
• 1 Star Director – maintain at least three commission qualified affiliates and have three recruitment legs generating $400 GV a month each
• 2 Star Director – maintain at least three commission qualified affiliates and have three recruitment legs generating $1300 GV a month each
• 3 Star Director – maintain at least three commission qualified affiliates and a downline generating at least $10,000 GV a month
• 4 Star Director – maintain at least three commission qualified affiliates and a downline generating at least $15,000 GV a month
• Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $30,000 GV a month
• 1 Star Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $60,000 GV a month
• 2 Star Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $120,000 GV a month
• 3 Star Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $200,000 GV a month
• 4 Star Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $360,000 GV a month
• Presidential Ambassador – maintain at least three commission qualified affiliates and a downline generating at least $600,000 GV a month
• Chairman – maintain at least three commission qualified affiliates and a downline generating at least $800,000 GV a month
• Executive Chairman – maintain at least three commission qualified affiliates and a downline generating at least $1,200,000 GV a month

Note that from the 3 Star Director rank, no more than 40% of required GV can be counted from any individual recruitment leg.

GV stands for “Group Volume” and is sales volume generated by an affiliate’s downline.

Commission Qualification

In order to qualify for commissions, Paid 2 Save affiliates must maintain five Travel Club subscribing retail customers.

Note that new Paid 2 Save affiliates have a 120 day grace period to satisfy this requirement.

Retail Commissions

Paid 2 Save affiliates are paid when retail customers pay $12.95 a month to access the Paid 2 Save travel discount portal.

The first fifteen membership sales pay a $10 commission and then $5 for every membership sold thereafter.

A bonus $25 is paid when a Paid 2 Save affiliate makes their first two retail sales.

A 40% commission is paid on any goods and services paid for through the Paid 2 Save branded mobile app.

Travel Commissions

A Paid 2 Save affiliate receives 40% of the commissionable volume generated by travel booking made through the portal.

Note that this is 40% of commissionable volume, not the amount spent in the booking.

Trilogy Pay

Trilogy Pay is a monthly payment to Paid 2 Save affiliates who have qualified at the Director or higher ranks:

• Director – $125 a month
• 1 Star Director – $300 a month
• 2 Star Director – $1500 a month
• 3 Star Director – $2100 a month
• 4 Star Director – $3000 a month
• Ambassador – $4500 a month
• 1 Star Ambassador – $9000 a month
• 2 Star Ambassador – $18,000 a month
• 3 Star Ambassador – $24,000 a month
• 4 Star Ambassador – $30,000 a month
• Presidential Ambassador – $60,000 a month
• Chairman – $75,000 a month
• Executive Chairman – $96,000 a month

To qualify for Trilogy Pay commissions, a Paid 2 Save affiliate must recruit and maintain three monthly-fee paying affiliates.

Note that only Trilogy Pay or Dual pay is paid out each month, whichever is higher.

Dual Pay

Paid 2 Save’s Dual Pay is paid out via a binary compensation structure.

A binary compensation structure places an affiliate at the top of a binary team, split into two sides (left and right):

The first level of the binary team houses two positions. The second level of the binary team is generated by splitting each of the first two positions into another two positions each.

Subsequent levels of the binary team are generated in the same manner, with each new level housing twice as many positions as the previous level.

Commissions are paid out based on volume generated within the binary team as follows:

• $2400 volume generated = $300 commission
• $8000 volume generated = $1500 commission
• $20,000 volume generated = $2100 commission
• $30,000 volume generated = $3000 commission
• $60,000 volume generated = $4500 commission

Only 50% of the required binary volume can be sourced from either side.

Note that only Trilogy Pay or Dual pay is paid out each month, whichever is higher.

Residual App Volume Commissions

Volume generated on sales via the Paid 2 Save app are paid out residually via a 3×10 matrix.

A 3×10 matrix places an affiliate at the top of a matrix, with three positions directly under them:

These initial three positions form the first level of the matrix.

The second level of the matrix is generated by splitting each of the three positions into another three positions each (9 positions).

Subsequent levels of the matrix are generated in the same manner, with each new level housing three times as many positions as the previous level.

A complete 3×10 matrix houses 88,572 positions.

A 5% commission is paid out on sales volume generated via app purchases.

How many matrix levels a Paid 2 Save affiliate can earn on is determined by their rank:

• Partner to 1 Star Director – 5% on levels 1 and 2
• 2 and 3 Star Director – 5% on levels 1 to 4
• 4  and 5 Star Director – 5% on levels 1 to 6
• 1 to 3 Star Ambassador – 5% on levels 1 to 8
• 4 Star Ambassador and higher – 5% on levels 1 to 10

Rank Advancement Bonus

Paid 2 Save affiliates who qualify at the 1 Star Director and higher ranks are paid the following Rank Advancement Bonuses:

• 1 Star Director – $100 a month for six months ($600)
• 4 Star Director – $833.33 a month for six months ($5000)
• Ambassador – $1666.66 a month for six months ($15,000)
• 1 Star Ambassador – $2222.22 a month for nine months ($20,000)
• 2 Star Ambassador – $3333.33 a month for nine months ($30,000)
• 3 Star Ambassador – $5000 a month for twelve months ($60,000)
• 4 Star Ambassador – $7500 a month for twelve months ($90,000)
• Presidential Ambassador – $12,500 a month for twelve months ($150,000)
• Chairman – $13,888.88 a month for eighteen months ($250,000)
• Executive Chairman – $20,833.33 a month for twenty-four months ($500,000)

Builder Bonus

The Builder Bonus rewards a Paid 2 Save affiliate when personally recruited affiliates qualify at the Director and higher ranks as follows:

• personally recruited affiliate qualifies as a Director = $25 a month for four months ($100)
• personally recruited affiliate qualifies as a 1 Star Director = $150 a month for four months ($600)
• personally recruited affiliate qualifies as a 2 Star Director = $200 a month for six months ($1200)
• personally recruited affiliate qualifies as a 3 Star Director =$333.33 a month for 6 months ($2000)

Chairman Pools

The Chairman pools are made up of 1% of Paid 2 Save company-wide sales volume.

Chairman ranked affiliates receive a share in a 1% Chairman pool.

Executive Chairman affiliates receive a share in a 1% Executive Chairman pool.

Joining Paid 2 Save

Paid 2 Save affiliate membership is $125 a month.

Conclusion

The five retail customer requirement is pretty much the only saving grace of the Paid 2 Save compensation plan.

Without it I’m pretty sure we’d be exclusively looking at affiliate recruitment, so it’s great to see Paid 2 Save have included a retail volume qualifier.

Unfortunately this doesn’t necessarily mean the company is in the all-clear.

First and foremost there’s no escaping that Paid 2 Save affiliates are required to purchase product each month.

(Paid 2 Save affiliate membership) includes (10) Pre-Paid Travel Club Memberships (30 day trial) that you can “give away” every month. Plus, it includes your personal Travel Club Membership.

As far as I can see this is for no apparent reason other than to generate sales volume within the compensation plan.

Company-wide, if more revenue is generated from affiliate fees than retail travel memberships (and retail customer spend volume), Paid 2 Save is deriving the majority of its revenue from affiliates.

The mandatory five retail customer requirement generates $64.75 a month, which is $60.25 less than each Paid 2 Save affiliate’s monthly fee.

If that deficit  is not made up by the majority of Paid 2 Save affiliate’s having more than five active retail customers, the primary source of revenue is from affiliates.

Given each Paid 2 Save affiliate is purchasing twelve memberships a month, for compliance purposes each affiliate actually needs a minimum of twelve active retail customers to even out their own monthly spend.

Not withstanding Paid 2 Save’s mandatory affiliate purchases is clearly “pay to play” and a regulatory issue in and of itself.

Paid 2 Save affiliates could easily generate paid memberships on the fly as required, but instead the company forces affiliates to pre-purchase twelve memberships a month.

What happens to those memberships is not tracked or factored into a Paid 2 Save affiliate’s income potential.

Again, this appears to be for no other apparent reason then to generate sales volume in the compensation plan.

Considering non-matrix commissions are paid out at a fixed monthly rate based on rank, the majority of this monthly rate being sourced from affiliate fees might also constitute a securities offering.

A broader compliance issue is that, once again, Paid 2 Save aren’t actually selling a product or service of their own. The company is still only selling access to third-party discounts, which and of itself is not a viable MLM product.

It’s not all bad news though, with some effort made to drive retail sales activity through the Paid 2 Save branded app.

Customers receive “travel dollars” which can be put towards travel discounts by using the app and sharing it with others.

Any sales activity generated by this sharing is tracked to the original affiliate who introduced the customer.

Without the glaring compliance issues evident elsewhere in the Paid 2 Save compensation plan, this is an otherwise promising incentive.

Unfortunately we can’t cherry-pick parts of the compensation plan over others, and the whole plan must be taken into consideration.

The good news is establishing whether your potential upline is running a legitimate Paid 2 Save business is easy enough.

Just ask them if their monthly active retail membership volume is higher than their own monthly $125 fee.

If not then it’s likely that as a company Paid 2 Save is deriving the majority of revenue from affiliates.

Given this revenue is used to pay out commissions (nothing in the Paid 2 Save compensation plan mentions affiliate fee volume as being excluded), that would mean Paid 2 Save is operating as a recruitment scheme.

One thing to watch out for is the four-month grace period (which honestly, I think can be reduced to two months).

If you can’t sell five of your company’s flagship memberships within four months, selling access to travel discounts is probably not for you.