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UPDATE 2/1/2019: Multiple commenters have stated that Lucrazon is no longer active or responding to calls or emails at this time. Lucrazon’s website remains active, but the company itself appears to have folded, possibly more than a year ago. Lucrazon’s founder Alex Pitt may have moved on to other ventures, and he may be operating those ventures under a new alias.
Lucrazon (lucrazon.com and lucrazonglobal.com) is an e-commerce merchant account provider that appears to maintain two separate sales channels to market two very different programs. The first, known simply as Lucrazon, is an all-in-one e-commerce solution that is similar to BigCommerce or Volusion.
The company’s other branch goes by the name Lucrazon Global, and it appears to bear some resemblance to a traditional multi-level marketing (MLM) program. Lucrazon Global recruits e-commerce merchants to become Brand Partners for a one-time buy-in of $1,000 per unit plus $50 per month, and these Brand Partners are then encouraged to enroll other merchants in the program and earn commissions on the revenues generated through these referrals. The merchant’s initial investment purchases Lucrazon’s all-in-one solution plus the ability to set other business owners up with merchant accounts through Lucrazon. Although the company plainly states that Lucrazon is not a MLM enterprise, merchants should note that its Brand Partner program is structured so that members are encouraged to buy in for an initial amount and then recoup that investment by signing up other merchants with the program.
One report from a former 72-year-old Lucrazon investor named Josef Kofman who eventually sued Lucrazon for elder abuse can be found here. Aside from recounting a harrowing ordeal for Mr. Kofman, the report suggests that Lucrazon’s founder has moved on to another venture called NetVence.
Lucrazon appears to have been launched in early 2014, although there is some evidence that it had a “prelaunch” phase of operations for an undetermined amount of time preceding its official launch. The company is a registered ISO/MSP of Merrick Bank, South Jordan, Utah, and is headquartered at 8855 Research Dr., Irvine, California, 92618. Alex Pitt is the founder and CEO of Lucrazon.
Lucrazon Customer Reviews
Here's What Their Clients Say
|Total Online Complaints||50+|
|Live Customer Support||Yes|
|Most Common Complaint||Sales Tactics|
There are dozens of negative Lucrazon reviews to be found online that openly accuse the company of being a scam. Most of these reviews are found in the comment section below, and there are also multiple independent sources devoted to determining whether the company is a multi-level marketing program. Multiple complainants describe the company as a Ponzi scheme or pyramid scheme. Additionally, there are at least six complaints filed on Ripoff Report against the founder of Lucrazon, Alex Pitt. Some of these complaints accuse Pitt of refusing to pay his workers while operating a merchant services company that went by multiple DBAs including PayPro, National Payment Provider, and The Latino Coalition. Company representatives have responded to all of these complaints by flatly denying the accusations, so it’s difficult to determine which party is telling the truth.
Positive merchant reviews of Lucrazon’s services should be taken with a grain of salt, as those merchants may be Brand Partners of the company with a financial interest in selling its products. This dynamic makes it difficult to find unbiased reports of the company’s service, but the surge of complaints in the comment section of this review strongly support the accusations being made about the company’s Brand Partner program. Multiple merchants have reported investing thousands or tens of thousands of dollars in Lucrazon without seeing any significant returns. These reports have lowered the company’s score in this section severely.
Lucrazon Online Ratings
Here's How They Rate Online
|Product & Service Complaints||3|
|Billing & Collection Complaints||1|
|Advertising & Sales Complaints||3|
|Guarantee & Warranty Complaints||1|
Lucrazon has an “F” rating with the Better Business Bureau and is not accredited at this time. The company has received eight complaints in the past three years, with three related to the product or service, three due to advertising or sales issues, one having to do with billing or collections, and one related to a delivery issue. Lucrazon resolved one complaint successfully, while five complaints received no response whatsoever and the remaining two complaints either were resolved to the dissatisfaction of the merchant or did not receive a final evaluation from the merchant. The BBB cites the five unresolved complaints as the primary factor lowering Lucrazon’s grade at this time. We agree with the BBB’s rating in this case.
Lucrazon Fees, Rates & Costs
A Closer Look at The Contract
|Early Termination Fee||$295 Plus|
|PCI Compliance Fee||$3.96 Per Month + $75 Per Year|
|Equipment Lease Terms||Variable|
Lucrazon offers different terms depending on whether a merchant opens an online store, purchases an online store with inventory included, or joins the Brand Partner program. Merchants who open an e-commerce store to sell their own products will be charged a one-time setup fee of $347 in addition to the rates charged by either PayPal or Braintree Payments. Lucrazon previously offered its own merchant account contract (available below), which included a three-year agreement with an early termination fee of $295 or Liquidated Damages (whichever is greater), a monthly minimum fee of $20, a monthly PCI compliance fee of $3.96, an annual PCI compliance fee of $75, a monthly service fee of $10, other assorted fees, and equipment leasing through Northern Leasing Systems (an “F” rated provider on CardPaymentOptions.com). As of this update, it is unclear whether Lucrazon still offers this merchant account option.
Merchants who do not already have a product to sell can open an online store using Lucrazon’s inventory and shipping apparatus. The cost to open this account includes a $547 setup fee and the associated payment processing costs. Merchants who wish to become Brand Partners must purchase an online store with Lucrazon’s inventory for a one-time cost of $1,197 plus payment processing costs. Brand Partners can then resell the company’s product to other merchants and earn residuals from those accounts. According to merchant complaints, the cost to become a Brand Partner was initially $1,000 per merchant account, with a minimum buy-in of 15 merchant accounts. The only way to recoup this large initial investment was to sell 14 of those merchant accounts to other business owners and earn residuals on them.
Lucrazon’s pricing has improved from the initial $1,000 setup cost, but it is still not especially competitive with similar e-commerce solutions. The company’s basic e-commerce package for existing merchants has a high setup fee and standard payment processing rates through PayPal and Braintree. Merchants who opt for Lucrazon’s standard merchant account will receive very poor contract terms. Lucrazon justifies the high setup cost by stating that it eliminates the cost of paying for a developer to implement its solutions. Development and implementation is a variable cost for most businesses, so Lucrazon’s fee isn’t necessarily cheaper than the cost of setup through competitors.
There are very few complaints from merchants who purchased Lucrazon’s e-commerce solution independently of the Brand Partner program. However, Brand Partners consistently complain that the product is not especially robust or unique compared to similar products within the industry. In addition, the structure of the Brand Partner program discourages merchants from publicly complaining about the product, which calls into question positive testimonials. If you have any experience with the standard Lucrazon merchant services contract, please leave that information in the comment section of this review. See the Lucrazon Merchant Application.
Lucrazon Employee Reviews & Sales Tacitcs
Should You Work For Them?
|Employs Independent Resellers||Yes|
|Advertises Deceptive Rates||No|
|Discloses All Important Terms||No|
Lucrazon appears to market its service primarily through the company’s Brand Partner program, which encourages merchants to purchase Lucrazon’s e-commerce solution and then refer other merchants to Lucrazon in order to collect commissions. In this regard, the company’s customers also serve as its independent resellers, which is an uncommon approach within the credit card processing industry.
There has been some controversy over whether Lucrazon is simply a multi-level marketing scheme rather than a merchant services provider, and the company has responded to these criticisms in a public post found here. The opposing viewpoint is best explained in this rebuttal to Lucrazon’s claims, as well as in the more than 40 comments beneath this review. The debate seems to center around whether the company’s primary revenue source is its Brand Partner program through Lucrazon Global or its merchant account solution through Lucrazon merchant services.
We are unable to conclusively determine which party is providing accurate information at this time, but the balance of the evidence supports the claims of Lucrazon’s critics. The company has received a large number of complaints stating that merchants were deceived by sales presentations promising daily residuals between $9.00 and $15.00 for each account, only to receive less than two dollars per account per day (while paying a monthly fee of $50 to keep their own accounts open). Complainants also report disappointment with the quality of the company’s software, stating that it is buggy, outdated, and vastly overpriced. On top of these factors, it’s reasonable to assume that Lucrazon’s complaints could be even higher if Lucrazon’s Brand Partners weren’t incentivized to publicly portray the company in the best possible light. We will assign the company a “D” rating in this category in light of the overwhelming number of complaints it has received.
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