Is points based incentive system a big fraud?

show me the money!The concept of giving incentives for participation in research surveys is very simple – for your valuable time and opinions the online data collection company will reward you with some kind of gift – it can be cash/reward points/subscriptions/coupons. Theoretically it all looks great – I mean for clicking on surveys you get rewards – everyone goes back home happy – right? Not at all – unfortunately fake online data collection companies have found a way to dupe gullible survey takers by something called as points based reward system. I know that most online data collection companies are using this system but today I will tell you how it is used to fraud people. So please read the complete article.

Let me first tell you the root cause of the problem.

If you need to recruit panel members there are 2 ways to do it:

1- Organically: By referrals from existing members.

2- Inorganically: By hiring a company (for e.g. ad networks) to recruit members via banner advertisements, email databases etc.

Now organic method is slow and takes time therefore companies have to inadvertently spend money inorganically to recruit members.

So you can safely assume that most of the panel members are recruited after spending certain amount of money.

For an online panel company this simply means that they have to somehow recover their panel recruitment costs.

In an ideal scenario companies will ensure that their panel community is active and regularly participates in the surveys.

But in an industry where most of the players are here just to make quick money this is a cumbersome task.

So the solution they come up with is easy – fool the panel member with bait and get as many surveys completed as possible before the respondents vanishes away.

This bait is basically the ‘point based system’!

On the surface it works in a very straightforward manner – for every survey you complete you get certain reward points – so let say for completing a survey you get 5 points – suppose the value of these points is USD 5 (1 point = 1 USD) but the data collection company will not allow you to cash this amount!

The catch is to earn a certain amount of points to cash the reward amount.

So in the above example it may be that once you have reached 100 points (= USD 100) you can request for the money to be transferred.

Now you must be thinking – what is so wrong about it? Just earn the 100 points and get the cash!

Like I said above theoretically it may sound OK but in practice online data collection companies plays big fraud.

Such online panel companies deliberately put the number so high that very few respondents are able to reach it. This is to avoid paying respondents incentives for their efforts.

What if after earning 99 points the online panel company stops sending you survey?

If you look at it – as per the rule you can’t complain and by purging you out of the system the company have saved USD 99 that they ideally should have awarded you for participation!

My friend USD 99 is a big amount which the online company can spend to recruit 33 more new respondents (if you take average per respondent recruitment cost to be USD 3).

With such a points based system most of the respondents gets disillusioned after few surveys and don’t pursue to reach the desired target.

It is really frustrating for anyone to spend time to participate in surveys and then wait for new surveys to come before they can think about actually getting any incentives.

In general most of the respondents are ‘forced’ to participate in innumerable surveys before they can see few dollars making it to their accounts.

This is one of the reasons that many people are not willing to participate in surveys – why waste time when there are high chances you may never reach the ‘100 points’ target.

Only a fraud online panel company will use point based reward system.

If you truly believe in rewarding your respondents for survey participation then give them rewards for every survey they undertake – the amount may be small (for e.g. USD 1) but at least the panel members are getting something concrete.

I know some of the fraud online data collection companies will complain that it is not feasible to transfer small amount of cash.

But there are methods to do so – what you need is will power and transparency to do so.

If you don’t want to dispense cash there are 10000+ other reward options – but don’t use point based incentive system – as it is a fraud and really sucks!

uSamp one of the most renowned online panel company provides 200+ gift options for their respondents – this only means one thing – that they respect their respondents time and efforts.

Now if you are a research panels buyer it becomes all the more important to know whether your online panel vendor has points based system or not.

Simply because such a vendor will have only disgruntled respondents – the result as you can guess – low quality responses – do you want such a thing to happen?

Make it a thumb rule – always ask your vendor what type of panel incentive system they have – if it is points based – please be cautious of such a vendor.

After all your research depends on the types of respondents you reach out to.

AkshayAkshay Kanyal writes survey research reviews on his popular blog Online MR. He’s an avid blogger, brand consultant and a content marketing expert, helping business owners to craft content that sells.

He provides content marketing advice to start-ups and innovation driven companies. He can be contacted at editor@onlinemr.com

You can also connect with him on LinkedIn ; Facebook ; Twitter

Comments

  1. Hi Akshay,

    Thanks for the mention of uSamp in the article. You’re right, we have well over 200 reward mechanisms, but some of our panel sites are points driven before users can cash out against those rewards. Beware of making a generic statement about points systems being fraud, because they are not. If you want to know how it really works rather than creating bold and untrue articles, then I can teach you!

    Ben

  2. Yes definitely there area number of ways to reward but some of them offer rewards based on the points that they get.Thanks a lot for this informative post.