As an entrepreneur struggling to make ends meet, the promise of earning "residual income" from companies like Tranzact Card seems like an alluring lifeline. But behind the tantalizing income claims lies the age-old risk endemic to multi-level marketing programs – the focus on recruiting downlines over actually selling products. Tranzact Card serves as a case study on applying due diligence before joining any MLM opportunity.
The Lure Hooks Me In
I first stumbled onto Tranzact Card through a Facebook ad touting:
"Generate $10,000 Per Month With Our Builder Plan"
The chance to generate life-changing income prompted me to attend an online "Digital Branch Owner" information session. The founders described a chance to promote "custom designed debit cards" to earn retail profits while building out a team earning passive overrides.
Several income examples caught my attention, like making $2,500 a month with only 500 monthly card sales across my downline. When they referenced ambitious marketers earning over $10,000 a month – I was hooked!
But The "Gotcha" Slowly Surfaces…
Upon closer inspection of the Tranzact Card compensation plan, I realized making BIG money banked on signing up an army of hundreds or thousands into my downline to drive the sales volumes promoting the debit cards.
The monthly residual Income depended not so much on my personal sales, but on the collective sales of all my recruits‘ recruits. I essentially assumed the role of a sales manager trying to scale up a salesforce vs a solo entrepreneur.
Digging deeper, I uncovered that generating those tempting 5-figure monthly residuals realistically required massive organization volumes, like:
- $2,500/month = 500 Total Card Member Sales (TCMS)
- $5,000/month = 2,000 TCMS
- $10,000/month = 8,000 TCMS
Since average card member fees ranged from $100-200, that meant my team needed to sell around $800,000 worth of debit cards per month to trigger a $10K check!
Suddenly, the income hype started to crumble…
The Recruiting Carrot – An MLM Hallmark
I also stumbled onto Facebook groups full of Tranzact reps obsessed mainly with signing up other partners vs selling debit cards. Comments like "DM me to blast your link to my 50,000 followers!" demonstrated generating card sales mattered less than cloning new distributors.
I even found Tranzact‘s terms and conditions declaring issues like:
"A DBO is not considered “Active” unless they have at least one active DBO on each of his/her binary teams…".
Essentially, without an active downline, ANY retail profits get wiped out from plateaued rank requirements. This forced recruiting people rather than acquiring real customers.
Additionally, references to $20,000 monthly residual payments tied to "4000 qualified dbos" betrayed the real focus – signing up new distributors instead of selling debit cards.
Researching Other Troubling MLMs
The more I researched, the more Tranzact Card sounded like manipulative MLMs I found on a recent FTC watchlist, such as:
- Lularoe – pushed consultants to take on debt by overbuying inventory in pursuit of bonuses
- Herbalife – misled on potential income, averaging only $245/year for Bottom 90% of distributors
- Advocare – facing a Federal Trade Commission pyramid scheme investigation
I even uncovered that 99% of all MLM participants lose money when factoring expenses like product samples, training, travel, and other business costs required to qualify for commissions and rank advancement.
Reflecting On Wiser Decisions
Looking back, I regret letting the financial allure of "residual income" cloud my judgement in properly analyzing Tranzact Card‘s income claims. When I eventually requested documentation supporting the $2,500, $5,000, and $10,000 monthly commission examples, I got no definitive response.
Here are smarter actions I should have taken from the start:
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Verify Average Income Statistics – Beyond hypothetical examples from spokespeople, demand proof that ordinary distributors realistically generate anywhere close to advertised commissions.
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Research Percentage Making a Profit – Check income disclosure statements and industry data revealing very few MLM participants recoup expenses, nevermind avoiding losses altogether.
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Calculate Required Customer Volume – Look past abstract compensation points, and map out exactly how many personal retail customers and aggregate group sales are truly needed to receive five-figure residual payouts. Model it mathematically based on average product profit margins and attrition rates.
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Review Pay-to-Play Pitfalls – Closely analyze terms and conditions to identify "qualifications" forcing you to purchase more products or maintain certain groups sizes solely to receive payouts and override commissions.
In Closing – The Burden Of Extra Proof Lies With MLMs
While the Tranzact Card MLM ultimately hooked me via income hype and reviewing tapes of luxury cars and tropical vacations, I ignored tell-tale signs of empty promises. Any company making exceptional residual income claims tied to downline recruiting warrants extra scrutiny by applicants.
And the onus lies with MLMs like Tranzact Card – not the struggling entrepreneur desperate for income – to prove with irrefutable specifics, not fluffy hype, that profitable incomes stem from product sales rather than funneling money from an ever-expanding pyramid of distributors.
So proceed with extreme caution before joining Tranzact Card or any multi-level marketing opportunities. Because you must painfully unearth the facts behind their tantalizing income claims before likely losing any money chasing the residual income dream scam.