This is a copy/paste of my personal views on the current ongoing freebie debate a lot of people are having.
More on this can be found on the blog of AnaLutetia.

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When I started SL almost 2 year ago now, freebies were “the way to go” for me, since I had no possible way to buy L$…
In fact: I only recently got a CC, so only as from November this year I’ll be able to actually buy my own L$.
I do have to mention that for the past 3 months I payed a friend € for them to upload as L$ and hand to me in-world, but I still spend cash “carefully”.
As a result, until a couple months ago, I either had to wait until I saved up the cash, by working in clubs or build and sell stuff on land of friends (where I also placed servers for webselling, and to this day I’m very grateful to those friends for getting that chance), or collect freebies, wait at lucky chairs and browse shops doing a sale.

I admit, I never IMd the people behind the freebies, but I was grateful they were around and it sometimes resulted in buying one of their normal items, if I had the cash.
So: besides for educational use, freebies were good things to search and get.

But that was then.

Now freebies are (generally) much better quality compared to when I started, and a lot more widely spread.
If “back then” I had 20 “nice” items from all the places I visited in a month, it was much.
Now, you can get more then 20 “nice” items… in a single day.

So I can totally agree with people saying there’s an overkill amount of freebies around, causing new residents these days to ignore what the shop actually has to offer.
And that’s not a good thing, since it may result in the closing of a good store.
That’s the last thing we want.

So, once in a while, it’s good to review what you’re selling.
Right now, I’ve deactivated all my items on OnRez and SLX, and am reviewing and remodelling my entire “brand”. And it’s not easy to pin what is worth keeping and what can be improved so it becomes worth keeping.
But one thing that seems to be very easy, is what to do with the stuff that is “not worth selling” anymore: according to the poll I placed with the blog entry I made on this, I should just delete them, and not put them up as freebies or place them in a lucky chair.
I can find myself in that.

There’s a RL business aspect that you won’t encounter fast in SL®: when something is out of stock, or has become outdated and no longer is produced, you can’t get it anymore. That doesn’t really happen “in general” here, only on special events… but it could be something to consider to do… perhaps give it a try with freebies?

In a nutshell:
I think freebies are not a bad thing, but I admit they’ve become available in a dangerously high amount when they don’t have any educational relevance, and should be used with better care.
Freebies should not stop to exist, but those non-educational ones (imho) should drop in number, and perhaps depending on what they are, how they’re made and who’s selling them, should become “a bit harder to get”.
One way is to reserve them for customers who actually spent L$, an other is to do just 1 or 2 freebies a month, you could place them at the back of your shop and fix a telehub so people have to cross your entire store, or perhaps just stick a limited available quantity on them (and maybe other items).

I can’t resist a poll on this: