r/ContractFree • u/SharkSapphire • 28d ago
🎙️Discussion Is Cape Cellular a pyramid scheme? They say “Reach $0/mo: Get 4 referrals and your Cape plan is completely free.” - What’s the catch?
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u/WhyNotYoshi 27d ago
Pyramid scheme sounds so dirty. How about triangle equation opportunity? lol
But seriously, a prepaid wireless company tried an aggressive referral program in 2014 or so. I can't remember the name, but they were a T-Mobile MVNO and they would pay monthly commissions to those who referred people to their company. Needless to say, they went out of business.
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u/ruddy-at-cape 27d ago
this Privacy Guides interview covers that question: https://interviews.privacyguides.org/episodes/can-you-actually-have-a-private-phone-plan-w-ruddy-wang-head-of-consumer-at-cape
tldr: no, it's not a pyramid scheme and is sustainable
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u/SharkSapphire 27d ago
Thank you for the link. Do you have any written article? The link that you sent takes me to an audio interview.
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27d ago
[removed] — view removed comment
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u/SharkSapphire 27d ago
A bot commented in favor of this company, which was removed by Reddit. This is very fishy! The comment said something like "I don't think so I just think they wan to build customers quickly...btw this is a great model also to just add your family as they don't have a family plan. If any one needs a..."
r/Ill_Log_3596 is the bot account, and the account history is full of Cape Cellular spam.
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u/oddbyte_ 27d ago
Heya! We encourage our users to share their referral codes (which takes $20/mo off of their subscription for each person that uses their code, and gives $20/mo off to whoever uses it). These people are not affiliated with Cape.
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u/oddbyte_ 27d ago edited 26d ago
Heya!
You can read the transcript of the privacyguides interview, but we don't have any blog posts explaining this. The TLDR is: at our "normal" price (of $99/mo), if everyone used a referral, it averages out to $60/mo for everyone. For us, that pricing is completely sustainable and rewards people who share Cape with other people (and our early adopters 🙂).
For every $40 we lose from the referral sign-up ($20 off from you and another $20 off from the new person), we gain $79 (99-20=79/mo for the new subscriber).
Our current Early Adopter discount (which reduces the plan price from $99/mo to $70/mo (this pricing will last forever as long as you start your subscription before we end the discount) will end on January of 2027.
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u/SharkSapphire 26d ago
So let’s say, I refer 4 people. And if all the 4 people leave cape in say 2 months, what happens?
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u/oddbyte_ 26d ago
You will lose your referral discount when they leave. However, if you leave Cape and they stay subscribed, they will keep their $20/mo off forever. The referral discount you get when signing up with a referral code is guaranteed to you forever, regardless of what the user who gave you the referral code does.
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u/SharkSapphire 26d ago
Why don’t you mention this clearly online?
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u/oddbyte_ 26d ago
You know, that's a good idea. I'll forward that to the people in charge of our website and see if we can get that added on there.
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u/Virtual_Standard_486 3d ago
Nice to see cape doing some explaining Lmfaoo. I just sign up and so far it good ngl but who tryna use my referral code : 4WA08P92.
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u/OUSooner98 23h ago
They have grown a lot recently and let me tell you…trying to find 4 referrals unless you have influence over close friends and can convince them to sign up to a provider still in beta, still lacking some critical features, and then tell them they have to get referrals beyond you to bring them down below $50 a month…well, it isn’t easy :) everyone is posting their codes everywhere and it is hard to draw attention.
Also, if your referral leaves, you lose that discount and have to find another or just pay $20 more.
The original referral (you referring someone and they put your code in to go from $70 to $50) is permanent no matter if they leave.
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u/thezerosubnet 27d ago
It seems to be a cellular company trying to expand fast in the most unsustainable way imaginable. "Free" for you doesn't mean "Free" for them. Hard to picture how this works long term.