Users complain about free iPod site

For better or worse, consumers nationwide -- and across campus -- have started to take notice of a novel online marketing scheme that seeks to acquire new customers through the lure of free iPods.

FreeiPods.com, run by Washington, D.C.-based company Gratis Internet, offers users a chance to receive a free iPod by first subscribing to one of several online offers and promotions, then persuading five friends to do the same.

The company may have to give out an additional $50 million worth of iPods, if all "confirmed identities" redeem their iPods.

However, complaints of lengthy delays and spam e-mail have brought a shadow on its reputation that the company has vigorously defended.

"We are working extremely hard to get orders out the door," said Peter Martin, a company co-founder, in response to complaints that iPods were not being shipped and that queries were being left unanswered -- some of these from Penn students, who are still waiting for delivery of their iPods.

"We are currently working with new vendors, and making improvements on shipping times, customer service and more. About 1,000 iPods are on back-order status right now."

Martin and his partner, Rob Jewell, contend that the fault lies with Apple, which produces most of the iPods that FreeiPods.com distributes.

"The wait is 100 percent due to Apple's manufacturing. The delay is three weeks-plus," Martin said. Jewell added that it "hurts us to get them out slow."

Hewlett-Packard iPods are being offered as an alternative. Released in August, the HP iPods use different software and contain the HP logo on the product in addition to the Apple logo, but are otherwise the same.

As for spam, the site's terms and conditions warn users that they might "receive e-mails we or another [third] party may send." However, the site owners say they maintain privacy standards necessary under their certification by TrustE and the Better Business Bureau.

"I personally wouldn't do it," said Steven Ujifusa, a graduate student in Penn's School of Design. "Considering the amount of identity threat that is out there, it would be best to err on the side of caution."

Another point of contention for would-be users includes the clauses written into the site's policies that allow the company to change the number of referrals necessary, or put a user's account on hold for whatever reason. Martin responded that the reason for all of these policies possibly stems from concerns about user fraud.

Whatever its policy, the company has purportedly been generous with its payouts. According to Jewell, Gratis has given away over $4 million in products through a network of free sites that includes FreeCondoms.com, FreeFlatScreens.com and, most recently, FreeDesktopPC.com.

"We are a leading online marketing company," Martin said. "Our campaigns have been very successful. We get referral fees, as high as $80 bucks. We simply run their offer, and send our advertisers a high volume of leads."

The company is able to distribute its free wares in conjunction with leading companies seeking advertising, including Blockbuster, Columbia House and BMG Music Service.

In the past, the site has also featured offers from The New York Times, AOL and eBay. Gratis does not directly deal with these companies, but works through a third-party marketing agency.

While it may be an easy way to get an iPod, Wharton marketing professor Peter Fader argues that this form of marketing is a flawed idea.

"It has no long-term value, and is non-sustainable. It relies on a gimmick rather than an interesting product or service -- in the long run, it does not leave sponsoring companies better off," Fader said.

In the short-term, however, the company is making money, and customers are hopefully receiving their new iPods.

"Even [for] the people who wait a month, it's free, and they end up being happy in the end," Jewell said.

Please note All comments are eligible for publication in The Daily Pennsylvanian.