Monthly Archives: July 2009

Legality of Cash Gifting

A lady called me today. She sounded worn, a little scared, and uncertain. She wanted a website – but you could tell she was not certain about even asking – not sure she could afford it, probably. I gave the standard reply: “Depends on what you need.” Then I asked her the standard exploration question: “What is your business?”

She said it was a Cash Gifting Program with a replicated website. I didn’t think much, I just said what I knew. “Ummm, those are illegal.” Then I followed with, “That kind of program is illegal, and you need to report this to the FTC.” She said “Thank you” a bit stiffly and hung up – I’m not sure if she thought I was nuts or deluded, or if that first sense of disaster was just sinking in. I wish I’d have thought to stop her, talk to her a bit more, help her know what to do.

Then I went on a research hunt to find documentation of what I knew. Well, a Google search for “cash gifting legality” returns all sorts of deceptive information. Claims left and right that cash gifting IS legal, based upon reports or information from the IRS.

Frauds! The IRS is NOT the issue here.

  • Cash gifting to friends and family is legal.
  • Cash gifting SCHEMES are NOT legal! They are nothing more than pyramid (Ponzi) schemes! CLEARLY forbidden by US trade laws. They fail on EVERY point!

Don’t believe me?

Such schemes use various methods to try to get around the laws using clever descriptions, but their descriptions are NOT what matter – the way in which the LAW describes it, and the INTENT of what they are doing is what makes it illegal.

By IRS definition, a Cash Gift is something given by a PERSON, to another person, with no expectation of return.

By FTC definition, an illegal pyramid scheme is one in which there is no legitimate product or investment going on, and which depends upon the recruitment of an ever larger group of people in order for anyone other than the top members to realize a good return on investment.

Any time an organization exists, formal or informal, for the purpose of Cash Gifting, the purpose and intent is no longer giving with no expectation of return. When you give someone money, and expect to MAKE money from it, it is not a Cash Gift, it is an investment, and you are a business. And this is a business with no product, no real investment occuring, and which only pays if more people join and pay into it. Pyramid Scheme, plain and simple!

These schemes, no matter how cleverly described, and no matter how slippery the leaders, get shut down. They are illegal, and no amount of claiming they are not will make them legal. No amount of “lawyer approved” claims will make them so – in fact, if they CALL it a “Cash Gifting” program, it is illegal, because Cash Gifting for profit is in itself illegal.

The thing is, why would you want to take the chance? People who create these are not “nice people who just want to help others”. They are scammers who want your money!

By participating, YOU are participating in an illegal scheme. If you DID make money at it, you would be liable for prosecution!

Why in the world would you want to take the chance of doing something that is clearly illegal, just because someone says, “Oh, our version isn’t illegal”? There are SO MANY things you can do that WORK to earn money, why would you throw away your money on such a thing when you know deep down that it just isn’t going to end happily?

Scamming is two sided. A scammer cannot take someone for their life savings unless there is someone on the other end of it who is greedy enough to want something for nothing – or unreasonable returns on their life savings. The person being scammed has to be WILLING to take the RISK of being scammed.

Ignorance accounts for some of it – but I don’t buy that most people who are scammed are ignorant. I think that they may be a little that way. But I think that in most cases, a little voice in the back of their head warned them that it probably wasn’t legit, but they let their greed or sense of desperation silence that little voice.

Don’t let greed overrule common sense. That little voice that warns you is the strongest protection you have against being scammed.

And beware of people who use supposed loopholes to try to persuade you that the thing that is illegal is somehow legal because THEY are doing it. If they have to use loopholes, they just aren’t good people. They are going to bend the law and look for loopholes with YOU, just the same as they are telling you they are doing with the government.

Good business doesn’t need to tell you that they are “legal because…”. Good business is CLEARLY legal.

Signs That Your Network is Dying

Forums and networks are HARD to get started. And once you get them going, it seems to be very difficult to KEEP them going.

We all like to think that when we begin an effort to get people together for conversation that there are millions of people out there who want to discuss the same things we do. But others rarely have the same agenda, even when they SAY they do.

Forums and conversational venues RARELY take off spontaneously. Getting them going takes a LOT of effort, and so does keeping them going. There are longstanding tactics that everyone uses – which sometimes are successful, but more often, just feel tired.

  • Regular moderator posts.
  • Encouraging members to spread the word.
  • Contests.
  • Controversy.
  • Daily “topics”.
  • Allowing ads one day a week (the result of which is, that usually, one day a week, you have lots of posts, which nobody reads, and that this is the ONLY day each week that you have posts).

We all do these things on our networks in an effort to keep it going. It may or may not help, and often it does not.

How do you know your network is dying?

  • When the only posts are ones you make yourself (or your moderators make).
  • When the only posts are on “ad day”.
  • When people ask questions and nobody replies.
  • When nobody ASKS questions anymore.
  • When the majority of new signups are hit and run spammers.
  • When your long time users no longer post.
  • When your moderators start dropping out.
  • When the only members you have that regularly do anything are the same people you associate with everywhere else online. Without new blood, networks die.

People online, as a rule, have a short attention span. While it is hard to get a venue going, it is even harder to keep it going for more than a year or two if you do manage to get it going. The initial burst of enthusiasm that people have over something new is short lived – about two months. You often find that once they lose that, there is nothing left and they wander off to see if someone else is more interesting.

Once you see those signs above, it is very difficult to bring it back from the edge of extinction. Oh, you can try, but often you are just beating a dead horse.

Nobody likes to admit that something didn’t work. But more venues fail than ever succeed, and the statistical difference between success and failure is monstrous. Perhaps one in a thousand ever even gets off the ground, and perhaps only one in a hundred of those keep going for more than a few months.

  • A heavy marketing campaign can help.
  • Listening to your users can help – if they talk. Often they don’t.
  • Intense involvement on your part, and recruitment of other helpers can help.

But there’s no magic formula, and there is sometimes no way to rescue a venue that is in decline – the perception of decline can be almost impossible to reverse.

Often, it is simply best to go on to the next thing.

When the Customer is Not Right

Circumstances in my business have given me a lot of reason to think about customer service, satisfaction policies, and refund policies. Having always felt that a business owner gives MORE, not LESS, and having been raised on the philosophy that you just accept hardship and cope with it, it has taken a great deal of thought, and reasoning to create some new policies which set a limit on how far certain types of clients can push me.

We charge flat rates, so we often have to set limits on what can and cannot be done within a contract. With the average client, a polite, “I’m sorry, but the technical difficulty of that feature is beyond what your contract covers” is enough to let them know where that limit is. And typically, we don’t have to issue refunds, because when problems are encountered, we can address them and help the client move past them.

Two situations recently made me start really thinking about when the customer ISN’T right, and when a refund should NOT be issued. Those are hard things for me to define, and I dislike it intensely when someone is displeased with the outcome. But when the problem is not one that I caused, but which the client brought on themselves, I am not responsible for making it right.

In one situation, the demands of the client became such that it was interferring with my ability to keep up with work for all of my clients. I eventually said NO, because it was unfair to the rest of my clients for one client to demand so much time and work that it was impossible to keep up with the reasonable requests of the others. I had one dissatisfied client. But to satisfy that one, I’d have had a dozen dissatisfied clients. And it needs to be stated, that this involved a fairly low priced contract, for which I had already delivered about 5-7 times the amount of work agreed on. This client would make requests that wasted time, and think nothing of it. “Just make two copies of that graphic so I can compare them and decide which one I like.” or “I don’t have the right text or image yet, just make one up so I can see what it might look like.” Those things waste time, and cost extra work that is not reasonable when time is not charged hourly.

In the other situation, the client asked and was informed about the amount of work their part of the contract would entail. They assured with enthusiasm that they were up to it, and were ready to get it done quickly. This was a half-priced contract where we were responsible only for install, design, payment processor setup, and support – we would do personal training on request at no extra charge. The client began the work, then lost interest, and changed their mind. We offered a training session – which they scheduled, then canceled. They then accused us of not informing them of the amount of work needed (which we had done both in person and in writing), and demanded a full refund of all money paid. Since we did not have a refund policy for this specific service, we looked at our general policies (which they had agreed to during the payment process), and offered a refund based on those terms. This meant half of the setup fee was refundable. The client said that was not acceptable, that they had never agreed to any such thing, and that we needed to refund the whole thing or they’d file a complaint with the payment company. We promptly refunded the amount of half of the setup fee, as we had stated we would, and informed them that they HAD in fact agreed, showed them the document, and informed them that since the services agreed on HAD been completed and delivered, and that there was no issue of either non-delivery, or misrepresentation of services, they had no justifiable reason to file a complaint.

In both instances, there were strong reasons for setting a limit with the client, in spite of having strong customer service ethics. It came down to sustainability and what is reasonable and fair. To satisfy ONE client in this instance, would have done long term harm to our business.

In the first instance, keeping this client and answering all his demands would have undermined our entire business. We over delivered, and he got far more than his money’s worth. He was angry that I refused to do more without additional pay. But this, again, was not something we caused, and was beyond reason to expect on his part. It was better to have one dissatisfied client than to allow one client to destroy our business.

In the second instance, we were dealing with a situation that we did not cause – in fact, we try very hard to ensure that clients purchasing that type of product KNOW that it will take work. She changed her mind. That wasn’t something we caused. This is a service for a direct sales company. Had we just given the refund to make her go away without being upset, then she would tell her downline to go ahead and order a site from us, that if they changed their mind, we would refund. That would do a lot of harm long term. We were fair and honest with her, and the problems were not things we caused, and we offered several options to try to help her overcome the problems, but she did not want to even try.

I really struggled with figuring out the appropriate thing to do in both of these situations. In normal circumstances, I am more than willing to go out of my way for a client, and to do more than they paid for. We typically include a certain amount of wiggle room in our flat rate quotes, and I expect to have to work hard for what I earn. I generally LIKE my clients and want to give a lot for them. But there also has to be a limit. Otherwise a business is not sustainable.

Because of these two clients, I now have a new refund policy for the one particular service, and I have a new guideline for myself, to know when it is better to “fire the client” than it is to continue working with them. Neither of those things are handled lightly – I never want a dissatisfied client if I can avoid it. But I also recognize that some clients never WILL be satisfied, and that beyond a certain point, it is THEIR choice, not mine. When I have done all I should have done, and more, then it is ok to let them be unhappy, and to walk away. It still isn’t a nice thing to have to deal with, and I don’t think I will ever be able to do that without a lot of thought and analysis of the situation, to make sure that I was in the right in doing what I did.

I don’t know if I have a point in all of this, except to share the experience and maybe the bit that I did get out of it. If I have a point, it is maybe that when you ARE doing it right, this kind of decision generally WON’T be easy. It wll always cause thought and discomfort. But that lines must be drawn for problem clients, to keep the business sustainable for the GOOD clients.

When you did not cause it, and when you did more than was reasonable to try to make it work, it is ok to let the client choose to be dissatisfied.

WildFire DSI Released Today

I rarely make product announcements, but am taking the liberty of doing so today. We’ve been working on a nifty little script for about 9 months now, and it is finally ready for prime time.

WildFire DSI is an auto-installer for Open Source or Custom website Scripts. DSI stands for “dynamic script installer”.

It works with our hosting billing manager (WHMCS), and on Cpanel/WHM reseller accounts, VPS, or dedicated servers. It has a lot of features which make it really cool, if you don’t mind my tooting my own horn for a bit.

The neatest thing is, that it can install just about anything. We have templated install files for Joomla, Joomla with VirtueMart, WordPress, and CRE Loaded/OSC. If it will install those, it will install practically anything. And it can install as many different ones as the web service provider wants to install.

In plain English, this means a client can go to the ordering system, choose from a list of website packages, for example:

  • Joomla with no frills
  • Joomla with a directory
  • Joomla with Virtuemart
  • CRE Loaded
  • WordPress
  • Joomla AND WordPress together
  • Magento
  • Or just about anything you want to offer them.

When the client purchases the site structure, the system identifies the one that was chosen, and automatically installs it. Instant website.

Our coder was truly brilliant about how he created the functionality. It is so flexible you can even make it personalize an install for the client.

We love this, we’ve been using it in our own business, in one form or another, for about 6 months. It allows us to pre-configure the install packages, which saves us so much time on the installations we do most often. It has also allowed us to tap into some fairly lucrative vertical markets (targeting a website service for a specific industry).

It went live today, at, complete with affiliate program.

I really didn’t even want to sell this. It is such an advantage for our business, and such a powerful tool, I wasn’t sure I wanted to let to go to empower my competition. I sort of wanted to keep it just for our students and our own business. People keep asking for it though. And I guess I want to share my knowledge and tools more than I want to hoard them.

Grow a Garden!

Gardening doesn't have to be that hard! No matter where you live, no matter how difficult your circumstances, you CAN grow a successful garden.

Life from the Garden: Grow Your Own Food Anywhere Practical and low cost options for container gardening, sprouting, small yards, edible landscaping, winter gardening, shady yards, and help for people who are getting started too late. Plenty of tips to simplify, save on work and expense.