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Is ProvisionRX a Scammy Pyramid Scheme?

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A couple of weeks ago, I got an email from a reader. (In keeping with the tradition of using Buffy the Vampire Slayer character names we'll call him Xander). Xander found my website because I have written about MLM scams in the past (such as MonaVie and One24). I get quite a few of these mails since there are literally thousands of these scams, but I can only write about a few of them. This email was about ProvisionRX, a discount pharmacy card.

I was particularly interested in ProvisionRX for a couple of reasons. One, my wife is a pharmacist, I used to be a pharmacy technician, and well, if it is a scam, perhaps I'm in a unique position to spread it at the annual APhA meeting. Some pharmacists might be interested in this kind of thing, but usually they are more concerned with the actual medications. The other reason I was interested in ProvisionRX is that when I looked into it, it appears Xander handed me a gun and gave me a proverbial barrel of fish. Now I just have to shoot them. When you are as Lazy as I am, this is gold. Gold!

So here's what Xander sent me (some slight cleaning for typos and such):

"Could you look into ProvisionRx? It's a free prescription discount card. They say that all you have to do to retire in 2 years, is to hand 10 cards a month. Of course you must get others to do the same - more priority on recruiting - by far. I got out of it, having lost $400 plus $39.95 for 4 months - $560 total. You can go into your back-office website and see the usages (prescription fills) handed out after that month. In January I had 3 usages. I honestly tried hard and handed out over 1000 in 3 months! Many are now saying the pharmacy won't take the card!"

If I were new to MLM, I'd probably miss the large number of red flags here. However, I can spot these a mile away now. Here we go:

  • Big Charges to Participate in the Business - It's $199 to get started, but Xander got pinched for another $189 on top of that. That's the fee for becoming a trainer, which pays out better.
  • Monthly Subscription - The $199 to start includes a $39.95 monthly subscription (we'll round it $40). That's for the back-office website and processing of the cards.
  • Not a Matter of Effort - Most of the people in MLM say that those who don't make money simply don't try hard enough. They pin the blame of the business failure on distributor's personal performance rather than the circumstances surrounding the business. As we can see, Xander tried extremely hard. This was the inspiration behind a guest post I got for JuiceScam.com: It’s Not a Matter of Effort, it’s a Mathematical Certainty.
  • No Retail Sales - The FTC has a guide about MLMs vs. Pyramid Schemes and the key focus point is that there are sales made to people not involved in the business. In this case, the product is a free discount pharmacy card, so there is no sale of product possible to people not involved in the business.
  • Focus on Recruiting - I get to this below...

I know what you are thinking... how does one actually make money from the business of handing out free pharmacy discount cards? That's what I was thinking too. Xander pointed me to a handy video on YouTube explaining how it works (the money earning starts 6 minutes in, so you can just fast-forward there):

The company will pay you $10 to print out ten cards when you join. So far so good.

Next, up... the recruitment

If you thought, "Oh crap. This is where it all goes to hell" you were right.

At around the 7:30 mark, you get to the demonstration of the recruitment. This one is by their own admission, "5 who get 5." You recruit 5 people to join at the first level, earning $80 each - total of a $400 bonus. When those 5 people sponsor another 5 people they get $10 each or a total of $250. On level 3, there are now $125 giving you $1250. On level 4 we have 625 giving you $6250. The fifth level pays $20 each so at 3125 people, you would be getting $62,500. Total all those bonuses up and it is $70,650. So what's not to like about that, right?

For that one person to make $70K a total of 3,905 people have been brought in each paying a minimum of $200, paying a total of $781,000 into the scheme for the business of handing out these cards. Keep in mind that it could be double if they opt for the better bonus structure like Xander did. Also, each of the 3,905 people are paying $40 for the back-office software, an earnings of $156,200 a month. Anyone with any experience in pyramid schemes knows that bringing in 3,905 is completely impractical even on a chain. If everyone in the United States was interested in this opportunity... a total of 300 million people, only an average town of 76,824 could mathematically make this money. Clearly, the whole of the United States wouldn't be interested due to the Reality of MLM and Saturation (some recognize the same, some don't want to recruit others, some people live in small towns, where recruiting is difficult, most have some form of insurance already and aren't interested in the product, etc.)

In fairness to the company, the video does say it is perfect example, but they back track from that saying that some will sponsor more and some will sponsor less making it appear to be an average scenario. At the 10:10 mark in the video they pull out the kicker (paraphrased), "Let's say that you fail by half? Would an extra $35,000 in income next year make a difference to you and your family." See what they did there? They took an exponential growth example and then divided it by a linear number. Sorry to get all "mathy" with you, but that's just a ridiculous abuse of mathematics.

Also keep in mind what the FTC says about pyramid schemes:

"One sign of a pyramid scheme is if distributors sell more product to other distributors than they do to the public."
"Another sign of a pyramid scheme is if the money you make depends more on recruiting — getting new distributors to pay for the right to participate in the plan — than on sales to the public."

So far all the money, with the exception of the $10 they give you for printing out your card is from recruiting with zero sales made to the public.

However, that just covers the Quick Start Bonus. There's more payment to be made! Let's see if its legit or if we are looking at more pyramid scheme shenanigans. The next up is the "Residual Income Infinity Bonus". The only thing I like better than infinity pool is an infinity bonus. The next time your boss asks you what kind of bonus you think you deserve, you should, with a straight face, argue for an infinite one.

The "Residual Income Infinity Bonus" works like this. If each person in your recruited "team" hands out 10 cards (I presume they could just be printed and tossed in the trash because the company isn't policing the handing out of cards), you'll make $1.80. The infinity comes in because it doesn't stop at level 5 like the Quick Start Bonus, it can go on for infinite levels. Of course if you look at a "6 who recruit 6" scheme the world's population is exceeded in 13 levels. In a 5x5 scheme, 15 levels is 30 billion, more than 4 times the world's population. But hey, 15 is pretty close to infinity, right?

The residual income cap is $60,000 a month, but in reality you won't need that because even in the "perfect scenario" described with the Quick Start Bonus that has 3,905, you'd make $7,029 a month. That's good money no doubt, but remember the number of 5 who recruit 5 is limited and really only happens for the first couple of people in the company if ever.

That brings us to the third phase of compensation, the income that is generated from the cards. You earn a cut of the discount each time a card is used. When you hand out a card, you get between 25 and 70 cents for each prescription. As Xander explained, in handing out more than 1,000 cards, he got 3 usages (prescription fills), so that's somewhere between 75 cents and $2.10. Keep in mind, this income doesn't come from those in your recruited team, but just yourself. This is actually the closest thing to retail sales in the compensation plan as this payment is unrelated to recruiting of any kind. However, without recruiting, you'll need to see a minimum of 265 usages on those cards in the first month to break even. That's presuming that they are all of the maximum 70 cent nature. The next month when you have to pay another $40 for your back-office you need to get 55 more. The number nearly triples if you get the prescriptions that pay only 25 cents. The retail business is clearly terrible and nearly impossible to make back your money.

It seems clear that ProvisionRX is a pyramid scheme based on the FTC's determination of the "money you make depends more on recruiting — getting new distributors to pay for the right to participate in the plan — than on sales to the public."

I could go on with more about ProvisionRX. He mentions that there is a toll-free number that tells you which pharmacies take it, but when people actually went to use it, the pharmacies didn't take it. The excuse from the company was that the information in the system is outdated. I can't speak to that, but if I was that person who paid $199 to get as a distributor and found out that it didn't work for me, I'd be very unhappy. On the other hand, if I had been given a free card, I might have just figured there was no harm in trying.

In the end, this looks like most basic of pyramid schemes. It reminds me of iJango, which is no longer business. The scam is the same: "Give us money up front and sign on to this subscription. We'll keep a vast majority of that, but if you recruit enough others to do the same you can eventually break even or perhaps make money. We are happy if you do that, because you just push another bunch of people into the hole. They'll have to recruit more people to get out of it and we'll make money each time."

Last updated on August 30, 2016.

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18 Responses to “Is ProvisionRX a Scammy Pyramid Scheme?”

  1. NotMyName says:

    I agree with a lot of what you wrote. The current plan pays out $0.50 per prescription filled with the card, or, when you pay the extra $180 to become a trainer, pays out $1 per prescription filled with the card.

    You will not get paid any money on prescriptions filled by people under you unless you have at least 3 people below you. If so, you can get between .18 and .24 cents, depending on how many people are below you.
    If any of those people below you drop out, their cards they gave out are still good – but you no longer get that money…it goes into a ‘pot’ that the very top of the company splits up – thats why it pays to be at the top.

    They hightly promote giving out 10 cards a month to make income, however, even the top top earner in the company made less than $5000 from the cards they handed out. Most of the money seems to be coming from recruiting, training bonuses, and developing the downline. If you just want to hand out the cards ad infinitem and live off the usage, that will be tough. If you hand out 100,000 cards, and 1% of them use them a year, that is only $1000 (assuming you are a trainer.. Giving out 5000 cards is tough, but 100,000 – that is a lot of people. Sure, maybe 2% or 3% may use them. Sure, maybe people will use them several times a year. But, making $70,000 handing out cards is near impossible. Makeing $20,000 is a huge stretch. The largest part of the money is made in recruiting. You can, give out cards, and make more than your monthly costs for the website (Expensive – $40 a month for a website that is the same for everyone is very expensive. It is not customizeable, so it is just a fee that also goes straight to the pocket of the company.) But the point is you can give out enough cards to make more than your costs. But what is your time worth? All of the efforts just to break even? At about $500 per year for the website plus your initial $500 investment, and card costs, it is a tough way to make any money at all.

    • Lazy Man says:

      Thanks NotMyName, that’s a bit more information than Xander told and more than I could find in the video. It still seems like you said, it is long odds to make money through retail means and recruiting people just puts more in the same hole.

  2. mike says:

    Lazy Man- Everything you say is true about PRX. I am with a company that makes its money just off the usage of the cards and no sign-up fees, monthly fees, and I even get free cards because I get out so many. The only thing you are off on his the usage and income off it. Currently right now I have just under 100k cards out in the marketplace and that yields me about 1,300 dollar per month so far. So that 1-3% usage you are talking about is monthly, not yearly. I have about 200 locations so far urgent care clinics/doctors offices/community health centers/dentist offices/and even some a few nail salons. It is a huge grind driving all around town but I can see it will be worth it in the end. 2-4 years out. Later this year my company is funding me to go on a crazy road trip to hit up about 200 Planned Parenthood locations and leave them with displays and about 1k cards each, so that will boost my numbers greatly. I have a couple people underneath me of which I make 25 cents, but I only got them by posting on another forum talking about PRX and telling people what this business actually takes and that PRX is a scam. I am not interested in recruiting people and just work this myself. I’ve only been doing this 6 months and haven’t even pushed it as hard as i can and already have 100k cards out there. Like anything worth attaining it takes dedication and hard work. It will take me about 2 or 3 years from now to get to 10k a month, but I will make it. Same thing as being an investment banker or lawyer, you have to go to a professional school first for a few years before you can start earning above average income. You have to put in your time, which is exactly what I am doing right now. I’d lke to direct you to the provision RX thread on scam dot com and I have tons of posts in there arguing with the founder of PRX ernie land, and I basically rip him to shreds, and I document what this business really takes to be successful. I am sure you will find it interesting. Let me know what you think.

    • Lazy Man says:

      Thanks Mike,

      If you look in the sidebar of this website I write about a few MLMs: MonaVie, LifeVantage, One24, Jusuru, etc. This has a lot of people emailing me to check out “such and such” MLM company for them. In this case, I had received an email from one gentleman who had put in the work, extensive work over many months and hadn’t seen a penny. The point of this article was to show how someone could give make a quick analysis and avoid being scammed. I have no doubt that if I looked into the company further like I have with MonaVie and LifeVantage and One24 there would be a cesspool of fraud. For now it looks like the great folks at Scam.com (not Chris Doyle) have that covered.

      Comparison of any MLM business (if your new company is MLM) to being an investment banker or lawyer is completely inappropriate as those are positions that pay well instantly upon being hired. There’s no MLM school that gives you tangible business skills and nationally recognized credentials that can be used at any company.

      I don’t know enough about your company because you’ve been a little coy in not mentioning. That’s a good thing though because the hope is to keep this on ProvisionRX. One important question to ask is, “Where is the money coming from?” With ProvisionRX it was from people paying into being part of the program. If this is the case with your company, the “pay to play” combined with a recruitment aspect makes it a possible pyramid scheme itself.

  3. mike says:

    The company is being ran in a non-mlm way. The company gets money from outside investors. There are no fees. i have never been told to get people underneath me and to just focus on getting countless cards out there. Which was a huge selling point to me because I knew they were running this company the right way. And was told the true % of usuage monthly, which is quite low. Less than 1% – 2% roughly.

    The reason companies like PRX have to do what they do is because they realize that 99% of the people interested in this type of business can’t do the kind of volume someone like me does. There are a lot of factors that go into that too. You can’t be lazy, you have to have some money saved up to be driving around to clinics, they have to realize this takes a year before you start seeing money that can sustain you while you continue to grow it over the next 1-5 years. So companies like PRX make it sound so easy, hey hand out cards and make money, when they know 99% of the people won’t hand out more then a few hundred cards that will yield only a few utilizations a month. So they have to focus on recruiting.

    The company I am involved with won’t just bring anyone in who wants to do this. I had a couple people contact me and I didn’t even put them through to my boss because it was obvious they wouldn’t be worth setting up. And then a couple others I put through to my boss and he said they wouldn’t be solid reps.

    • Lazy Man says:

      I think the reason that reason companies like PRX do what they do is because they can make money off of the people who attempting to do the business. At that point, it’s a little like a late-night No Money Down program that costs $500 for informational tapes. The reason why people sell those to people is to make money. ProvisionRX does the same thing, just in a different way.

  4. […] Is ProvisionRX a Scammy Pyramid Scheme? Reply With Quote   « Fitness myths | – » […]

  5. lauren says:

    I am a member for 5 months . The information is not complete. You can get up to 19 dollars each time someone uses your card at the top level. Its not 80 dollars when I sign up a new person its 200 at my level QM . The fast start bonus is one of these special that are added to motivate new members. Depending on whose training you are listening to and their goal you will get information for that trainer’s objective, but this is not a complete picture. You need to join the live call in training to hear what the company is saying Monday nights [Editor’s note: number deleted, this isn’t for marketing ProvisionRX] theres a Special this sunday night 9 PM Eastern.

    • Lazy Man says:

      Lauren, you seem to be selling the product when you say, “up to 19 dollars.” There’s a big difference between that and the typical case. You can get up to millions of dollars every time you play the lottery. That doesn’t mean it is the typical case. The FTC’s Endorsement Guidelines suggest that endorsers use the typical case. Perhaps they got upset with weight loss companies saying you can lose “up to 120 pounds” in a particular program, where that is a clear extreme case.

      The person telling me about this company had literally given out thousands of cards and received something like $3 in a month’s time. That’s hardly the scenario of getting $19 multiple times per card.

      The $80 number came from the video which was accurate at the time of this posting. Perhaps your QM (whatever invented jargon that is from ProvisionRX) is different from the standard case. Sorry, but I’m going with the standard case unless you want to bring documentation to prove differently.

      Every MLM company has a fast start bonus designed to suck people in. It’s a little like a drug dealer giving you a little bit for free to get you hooked.

      There’s no need to have a live call. They should just put the audio of what the company is saying on the Internet. Who uses a phone to hear on-demand audio nowadays?

  6. lauren says:

    All I am saying is a lot of conclusions have been drawn without proper research . I pulled up a copy of the payment plan and I am copying and pasting its contents for you to read. This is from my back office.

    [Editor’s Note: Please don’t copy and paste from private resources. They are probably private for a reason. Give us the publicly available information from the company published materials.]

    Now get this….. Our company pays out a GUARANTEED 65% of all its revenues to the field verified by a top CPA Firm when all other Network Marketing Companies only pay out 35% – 42%. We even have a Monthly Differential Bonus which is compensation left over in the event the pay plan did not reach 65% and the difference is paid to the Vice Presidentials and Presidentials. THIS GUARANTEES THE 65% IS PAID OUT.

  7. lauren says:

    Now whats the math on this? The card use depends on your business savvy and creativity in getting them in the hands of those who will actually use them

    • Lazy Man says:

      Paying out 65% is actually pretty low when the distributors are doing all the work.

      Explain how the person telling his experience in handing out thousands of cards and receiving next to nothing works? A company could pay out 95%, but if the top 1% gets 94% of those profits, like many MLMs, there’s no use in joining.

      Distribution of the profits is key. Someone handing out thousands of cards and making $3 doesn’t make sense. There are probably people at the top who have referred people and don’t do any work handing out cards and such making thousands of dollars.

  8. mike says:

    Lauren – PRX is a scam. Just telling it like it is. You will end up getting screwed for the time and effort you put it. You said you have to participate in a live call on mondays. For what exactly???? To listen to a bunch of horseshit?

    All people need to do is get into dozens and dozens and dozens of community health centers, doctors office and urgent care centers and get out 10’s of thousands and hundreds of thousands of cards. There is no secret to this. If you hustle and drive around 8 hours a day and get displays with cards in them and then go back and refill those locations while getting new ones, then your work will pay off. I have over 115,000 cards in the marketplace. I am currently getting about 1,700$ a month in residual income from the work I have put in up until now and if I am currently saving people roughly 130,000$ a year in discounted prescriptions.

    This business is a GRIND and is NOT easy. But the hard work you put in will lead to residual income but you need to get out at LEAST 300k cards into the marketplace to have a nice wide cut revenue stream. You clearly have no idea what this business takes, and I can guarantee you will not make money in it because A. you are with a shady company and B. You are not doing it the right way whatsoever. You reap what you sow in this business 100% and your methods don’t sow anything.

  9. mike says:

    Lauren –

    You say that conclusions are being drawn without the proper research. Who gives a crap about any of that or what the payout% is when you are not doing this business the right way to begin with?

    If you came around with me for just 1 day and saw how hard this is and what a grind it is then you would probably be very discouraged. If you work hard and hit the pavement for 2 or 3 years. you will have awesome money from this coming in each and every month. You aren’t even in the ballpark of knowing what it takes to make money and succeed in this business.

  10. Lauren says:

    since you are censoring my comments and deleting what you don’t want to be seen please take me off your site and I have no further comment

    • Lazy Man says:


      I have only protected people’s copyrights by not allowing you copy and paste material that is behind a login. As I mentioned, if you can provide a link to the publicly available material, I will include it. I can’t include material you are copy and pasting without permission. Also, it isn’t your writing, so I’m not censoring anything from you.

      I haven’t deleted anything you have contributed.

      You are not obligated to be on my site. If you have subscribed to receive emails for comments, the emails have instructions to follow to unsubscribe. You control your own subscriptions, not me.

  11. rich says:

    PRX is a scam. The only way to make BIG money is by recruiting thousand of people that are willing to pay $40 a month untill they see is costs them to be in this business. I was with PRX and handed out 5000 cards in the first year while working at a job 60 plus hours a week. I got on average 8 usages per month. I could not keep paying $40 a month and get back $8. If there were no monthly fees, it would be a great business. I live in the midwest and almost everyone I talked to about joining PRX were smart enough to not get involved. I would not recommend PRX. Also, the money back guarentee is a joke. If you do not have proof that you have met the minimum requirements or in my case, if you run the business like you should, PRX tells you your tax savings from a home base business is your refund. Good Luck

  12. […] they are getting away with making illegal health claims about their unproven supplement. I covered Provision RX… yep another pyramid […]

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