Cash gifting has really become popular on the Internet lately. If you’re not familiar with Cash gifting this is a money making concept where you pay your sponsor a certain dollar amount and give them your first and sometimes your second sign up for being your sponsor.

Now that you’ve passed up 2 enrollees you can supposedly start making all the money. As I will discuss later this is where most people fail.

Now this is not a real business in fact I think they prevent you from saying that this is a business. They teach you to say stuff similar to: it is a group of like-minded individuals coming together to improve each other’s welfare. I will discuss exactly what this means a little later. In order to get the true insights to on Cash gifting and really get into the guts of the program I joined two of these organizations. Not to actively promote but for research.

I found it strange that one of the first things I learned about cash gifting after joining was that they had it entire list of words are you weren’t allowed to use. Now these were just average words that she would use in a regular business setting such that is income, self-employed, business, profit.

Now the question of is it legal?

After discussing with a couple of attorneys we all came to the same conclusion that it is probably not illegal but definitely in the gray area. It is not a Ponzi scheme or similar but it is certainly not a business. And remember you have to work to promote this program as hard as you would a regular business so why not promote a real business.

But what I really want to talk about is the reason why all Cash gifting systems will fail for the average person, the compensation plan.

The funny thing about it is that cash gifting promotes its compensation plan as the power of its system not the Achilles’ heel. You may be wondering how they can promote their common plan as the power when it is really where people fail? Then please read on.

Why you ask? Because after you sign up your first one or two enrollees you are now in direct competition with your sponsor. They make no more money off of you and every single person you enroll is one less person they’ve enrolled. The very system is based on attrition. Not on teamwork and success.

Unless you are a very good Internet marketer this is where you will probably fail. The reason being you are left alone way too early because after your first or second pass up you are no longer profitable for your sponsor. And unless you can hit the ground running you’ll be left to sink or swim on your own.

This has nothing to do with cash gifting but on a funny side note 1 of the organizations I joined to research actually sent me some marketing information and one of the companies they highly recommend it was under investigation by the government.