Intro

Whoever said there s no such thing as a free lunch hasn t been dining out this recession.

As more consumers have snapped their wallets closed, desperate companies have are bringing back the once-humble freebie. The bonanza encompasses everything from fast-food chicken dinners (thanks, Oprah!) to tech toys (a free netbook or camcorder with some Verizon service bundles ) to a few months of free rent. According to Ryan Eubanks, founder of deal-spotting Web site HeyItsFree.net, the value of offers on the site has spiked this year, with its volume of daily gimmes up 30 percent.

Many of these giveaways target the unemployed what Michael J. Silverstein of Boston Consulting Group dubs this altruism marketing. When Debra Fidler of Arlington, Va., for example, was laid off last winter, she had to give up little luxuries like regular trips to the hair salon and local boutiques. But not Botox. Thanks to a local spa offering free injections for the unemployed, Fidler may still be pounding the pavement, but at least her forehead is wrinkle-free.

Despite their own battered bottom lines, companies have plenty of reasons to give away the store. For one thing, free seems to be the only word that still perks up the ears of consumers jaded by the past year of endless sales and discounts. And in an era of populist outrage over corporate excess, giveaways especially those aimed at groups like the jobless can go a long way toward building goodwill. What s more, says Mike Gatti, executive director of the Retail Advertising and Marketing Association, many companies prefer freebies to price reductions because when the economy starts to rebound, it s easier to abandon them without upsetting customers.

Of course, free doesn t necessarily equal no strings attached. Many of the most enticing sounding offers require a hefty purchase to qualify; others have lists of qualifications that make an FBI background check look lax. Then there are the no-deal deals, arrangements that trade an up-front freebie in exchange for paying more in the future. So we decided to sort out the free from the sort of free, combing through the fine print on a few of the latest giveaways.

Travel

Bill Crane, a communications executive who s on the road as many as 60 days a year, sees his share of travel offers and didn t expect much from the latest proffered by the InterContinental Hotels Group: one free night for every two paid. But the deal, it seems, was in the details; the offer could be used at any of the company s brands, including the ultraluxe InterContinental properties, allowing Crane to parlay four recent inexpensive nights at U.S. Holiday Inns into two freebies at the InterContinental Hong Kong (average room rate: $400). It s like finding cash on the ground, says the Atlanta resident.

Indeed, while freebie-loaded packages have long been a travel-industry staple, the latest deals now include even the one sector that previously played hard to get: luxury. For travelers pining for seats at the front of the plane, there s British Airways first-class freebie, buy-one-get-one fares on all premium tickets (available to holders of a British Airways Visa card), while high-end cruise line Regent Seven Seas now allows guests access to most shore excursions free of charge. Tony hotels are also getting into the gratis game, with the Mandarin Oriental handing out spa credits and free nights and the Ritz-Carlton launching a three-nights-for-the-price-of-two package deal at some properties.

Free offers are especially popular with hotels because they allow properties to put more heads in beds without dropping rates, which are notoriously difficult to jack up again later, says Bjorn Hanson, a professor of hospitality and tourism management at New York University. Hotels also hope that these guests will boost revenue by spending on drinks, dinner and other extras not included in the package price, he says. While freebie packages can be steeper than basic room rates, they re generally a good deal, assuming you use all the otherwise pricey add-ons. Recently, the package price for a night at Florida s Ritz-Carlton, Key Biscayne was $399, or $129 more than the stand-alone rate on the same room; but with free breakfast, parking and kids activities thrown in, the total savings can easily shave 45 percent off la carte pricing.

Real Estate

With the housing market still scraping the bottom, it s no shock to see would-be sellers attempting to sweeten the pot with comps like convertibles and spa getaways. (Even celebrities aren t immune; former football star Dan Marino recently offered $1.5 million worth of designer furniture and a signed football with his Florida home.) In fact, more than 40 percent of sellers offer some incentive, according to the National Association of Realtors. More surprising is how these offers are cropping up in the typically more-resilient rental market. Although a few building owners have tried throwing in extras like free cleaning or personal-training sessions, most are appealing straight to renters pocketbooks with a month or two of free rent. Actually, so many landlords are offering free months that the average national effective rent (the amount paid after freebies) is now more than 6 percent lower than the average listed rent, according to Marcus & Millichap Real Estate Investment Services.

Another hot spot for real estate freebies is the remodeling industry. With spending on home improvement predicted to drop 12 percent this year, more contractors say they re turning to creative ways to persuade customers to sign on the dotted line. Some, like Linda Minde, have taken a straightforward approach; Minde s company, Tri-Lite Builders, took out ads in her local Phoenix-area newspapers touting an offer of up to $1,000 worth of free work. Others offer freebies on more of a case-by-case basis. Chuck Weidenbach, project manager at Madison, Wis. based Kitchen Ideas Center + Design, for instance, says he s tried several successful incentives this year, ranging from little extras like a gratis $125 lighting plan to a full $8,000 worth of services he donated to a client in exchange for referrals.

Health Care

Health care may be one of the few sectors where free services don t always require an additional purchase, but it s also the most restrictive, with many offers available only to those who lost jobs or health insurance in recent months. Still, people who fit the description will find a variety of choices, like gratis walk-in treatment at Walgreen s Take Care retail clinics and pharmaceutical giant Pfizer s recent pledge to provide more than 70 free prescription drugs. Of course, to take advantage of these offers, patients have to bring both paperwork (to prove that they are unemployed) and a keen eye for the details Pfizer, for instance, requires patients to have already been taking their drug for at least three months.

As for doctors, discounting remains more common than straight-up freebies. (In fact, many doctors cannot legally discount copays and other fees.) Still, there are a few exceptions, like the free generic medications offered by Hello Health, a group of New York City doctors who specialize in treating uninsured patients. In general, Ted Epperly, president of the American Academy of Family Physicians, says doctors are increasingly willing to waive some fees for needy patients; in fact, a recent survey by the group found that 71 percent of family doctors reported providing more uncompensated health care in the past several months. Patients who have just lost their job or insurance should ask their health care providers whether there might be some room for negotiation, says Epperly.

For those who have (so far) managed to hang on to their jobs, there are still a
few free options, mostly centered around elective or cosmetic procedures and targeted at repeat patients. For Susan Dutton, a project manager from South Jordan, Utah, seven years of faithful visits and countless referrals to plastic surgeon Renato Saltz have earned her a coveted friends of the practice designation and the free massages, treatments and product samples that
go along with it. I m in there like clockwork, she says. Those incentives make sure you re coming back.