Here’s another potential $200 bonus for placing a trade in newly opened account at Forex.com by July 31st. The application seems to suggest the backend is also run by Gain Financial, same as with Zecco Forex. The promotion code used is CashAd05. The offer appears open to all, as there is a banner linking directly the bonus page from the Forex.com home page.
The cost for a trade can be held under $10 if you simply do a quick buy and sell roundtrip trade. Use the demo program before trading with real money, so that you properly understand the effect of lot sizes and leverage. FX trading can be very tricky. The fine print:
*To qualify for cash bonus, you must open and fund a new FOREX.com trading account by July 31, 2009. After first trade is initiated, cash bonus will be deposited to your account within 3-5 business days. Accounts transferred from other businesses that principally operate as a forex dealer, futures commission merchant, or securities broker-dealer are eligible to receive an additional $50. FOREX.com may request documentation to prove account withdrawal or transfer such as, but not limited to, a copy of your account statement no older than 30 days. Initial deposit can be withdrawn at any point. To withdraw cash bonus, initial deposit must not be withdrawn for a minimum of 90 days from the first trade. FOREX.com reserves the right to deny bonus payment if customer does not meet FOREX.com account opening procedures or the terms and conditions of this offer. FOREX.com reserves the right to determine cases of promotion abuse. Existing FOREX.com customers who have funded and traded are not eligible to receive this promotion. This offer is available to self-directed trading accounts only. Managed accounts and accounts referred by an Introducing Broker are not eligible. Limit one cash bonus per customer. FOREX.com reserves the right to terminate or modify the terms of this offer at anytime. This offer is non-transferable.
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Jonathan.
I have been a reader here for sometime now, and I read your tips to receive the promo offers and “free money” and understand you can make some decent money on the side by doing such a thing. My question to you, do you consider yourself an ethical person and do not feel there is anything wrong with what you’re doing?
The reason I ask, is because these companies are giving these offers to reward customers and to try and gain business to operate profitable. Your actions seem unethical as you’re finding loopholes and making money off such promotions.
I can understand if you respond with the argument that big business take advantage of the consumer in the same way through fees, penalties and such, but surely you’d find holes in that argument as well.
Just curious towards your thoughts, and how you justify this. Would you say you’re lending them money, therefore you expect a reward? Would you consider it a “win, win” for both parties or do you feel you’re the only one making out?
If I am incorrect in beleiving you open accounts, do the minimal activity to receive the promo$$ and than close out the account, than consider me the fool.
Well, I guess the same argument could be made about any coupon… It is the price a company pays to get you to TRY their service. In the case of Jonathon, I’m sure he has tried many credit cards for example, and continues to use the ones that are his favorites and provide him with a useful benefit.
Companies realize this and every company puts in clauses to insure that you spend enough time with their product to give them a fair shake. They of course realize that some of the bonuses will be given away without every person becoming a long term customer, but how many advertising dollars are wasted in magazines and on T.V. on customers who never purchase anything? Do you feel like you are stealing TV if you watch a show and don’t buy the products advertised? (Or worse, TIVO through them!)
All that said, I have no problem whatsoever taking money from the credit card companies… In fact, I would prefer to sting them a bit as the vast majority of “promotions” end up costing customers who don’t read the fine print in the long run.
Simply put, if the companies find that the promotions they are running aren’t making them money they’ll stop the promotions…
Can we fund this promotion with credit cards like the Zecco promotion? If so, does it show as a purchase on the credit card?
NY Guy,
I don’t see a problem with opening accounts for the bank bonuses. It probably costs financial institutions at least $25 in advertising to get a customer signing up for their services, so why not use free word of mouth advertising and actually spend the $25 by giving to the customer?
There is got to be at least a percentage of the bank bonus customers who end up using their accounts, and thus the financial institution ends up making money in the long term.
I for example opened an E-Trade savings account back in 2008 with one dollar, and got a cool $25 dollar bonus on it. I did however move some of my savings over at E-Trade, and I am still a customer there. I even opened a ROTH IRA with them eventually. I can tell you that the $25 E-Trade gave me for opening a savings account was a win win for both parties.
Best Regards,
Blogging Banks
To both comments:
I don’t really see the coupon argument as similiar. Unless you’re stating the following: A bottle of Soda is on sale for 50% off with a coupon to $0.50, so you make the purchase and turn around and return it days later receiving a refund for $1
I understand the reason companies do it, to get people to test their product. Here’s my opinion, if you’re knowingly working the system to make yourself a profit without the intention of giving the product a fair shake, than one might see that as unethical?
I was just opening a debate on the thought of ‘is it right or wrong’.
You mention that you’d want to ‘sting’ these big credit card companies, because often the promos cost the customer in the end, but would you still work the system of a small business or an individual?
I think it is perfectly ethical and above-board. The company in question sets the rules, sometims paragraphs and paragraphs full of rules. The customer in this case, Johnathon, is merely following and fulfilling the rules as stated by the company. He is not breaking the rules nor somehow trying to defraud the company. Certainly if the company has a problem with the way they have written their rules, they will waste no time in amending or rewriting them!
I see no ethical problem, either. Look at the case of rebates offered by companies. The rules for submitting a rebate correctly are quite detailed and if you miss one step, you do not receive the rebate. Companies bank on the fact that many many people will either be too lazy to follow through with the rebate process or make a mistake in the submission process. It’s actually the companies offering a promotion, but knowing, with the benefit of statistics, that they’ll probably still make a fair amount of money from people who make a mistake. I think you’re being ridiculous if you’re actually feeling sorry for a large corporation with its whole departments of legal, marketing, sales, etc. working together to create a promotion.
NYGuy —
I see where you are going with this but just like what Dee said, the company set the rules and Johnathan (and the rest of us) are only playing by the rules.
It would only be unethical if somebody signed up an offer with “false” information in order to get the freebies. Or if they started spamming people and trying to use their information… If you are abiding by their rules, how are ethics involved??
Good point Dee,
I got a free DVD player for making a $25 deposit at Compass Bank and I never had any intention of really banking there. I was impressed with their service though, and now I have two business accounts, a money market and a joint checking account with them. They’ll get a look for my next home loan too.
Companies know people will “game the system” and they have a % estimate of those who will. If they’re offering a $200 bonus, my guess is it costs them $250 to attract new customers through traditional methods (e.g. spending $10k in advertising will give them 40 new customers). Knowing 20% (I’m making up a %) of the people are only applying for the bonus, a $200 bonus costs $250 per true customer. If each customer ends up being worth more than $250, it’s all good.
So if the company knows in advance that some people will apply just for the bonus and then leave, and is in fact ok with that (although obviously they’d prefer everyone were a true customer), I think that affects the morality of doing so.
Having worked for a major wireless company in customer acquisition for a number of years, trust me they set acquisition costs anywhere less than the value of a customer’s purchases. That’s why in cellphones a prepaid customer pays almost full price for their cheapo phone, and smart phone customers get $200+ subsidies (since they’re on highly profitable voice and data plans and are typically high usage users).
If this is unethical then what do you call Amway/Quickstar folks 🙂
This always comes up from time to time, but here goes. Forex.com is advertising. Yes, it spends $200 on each bonus. But some people will open up, try it out, and not qualify. Some with open up and eventually pay thousands and thousands of commission spreads. Some will open up, decide that FX trading is for the birds, and close. As long as Forex.com ends up in the black overall, they are very happy.
Incentives in which some are losers are a perfectly valid form of advertising, and it can be very powerful. Why do you think huge corporations like Bank of America still do it regularly? It works.
The same example I always give is the loss leader of milk in groceries. Every week a grocery might sell milk for 99 cents a gallon, with the expectation that once you’re in the grocery store you’ll buy eggs or Cheetos or whatever for them to make a profit. Also, you might decide the store is clean and useful, and come back again next week when milk is not on sale. Is it unethical to walk in and just buy the milk?
Forex.com has made a decision to require one trade. I have seen other FX companies offer $1,000 bonus but require 200 trades. It’s their choice, and I don’t view it as a loophole.
“To withdraw cash bonus, initial deposit must not be withdrawn for a minimum of 90 days from the first trade” This doesn’t sound as good as the Zecco promotion. If I were to leave the 10,000 in that account for 90 days, I will have to pay interest on my credit card. If you have cash laying around then it might work. I calculated the APR to be around 8%. Is it worth the hassle?
Very good point Jonathan and it puts a fork in my argument. I suppose if you try out every store offering the discounted milk to get people to come in and buy other goods, you wouldn’t be unethical. As you stated, if you just shopped around to take advantage of the chepa milk and nothing more, the store could possibly grab you as a new customer.
Understood.
I was not calling you out, more just throwing out a different perspective.
Thanks for responding.
Can someone do the Zecco promotion AND this one? Or because they’re backed by the same group/company/whatever, could you really only do one of the two?
I think NY GUY has a thing for Jonathan…EVERYONE put a fork in your argument.
Jonathan, you are so wrong. In some states you may not put milk on sale; it’s against the law. How about them apples?
Justin – I’m not sure if you’re kidding or not. How does the price-fixing of milk in your area have to do with my loss-leader analogy? Let Wikipedia explain instead…
http://en.wikipedia.org/wiki/Loss_leader
Yes, apples would work too. 🙂
If you believe Wikipedia, then not only the milk and apples)))
“Some loss leader items are perishable, and thus can’t be stockpiled”
Dear Fellow Traders…
Not to interrupt your subject, but I’d appreciate a little help right now.
This is my 12th week of paper trading. I’ve done well, and am more than ready to graduate from PT college (LOL) to where I was all set to open a live account, when I did some final research, (to make sure of the Broker I had selected) and now having second thoughts on my selection?!
Just wondering what Brokers you might recommend we start with? I’m right now considering FXCM, GFT, Alpari, and Forex.com plus a few others . . .
A nice start up bonus would be nice too, since I have limited resources at the present time, which hopefully will change pretty fast, once I’m trading live.
Thank you for any suggestions!
Grace & Blessings . . . John / retired minister