The Ultra Secret Society of DirectBuy

25 comments:

1. On May 27th, 2006 at 7:11 pm, Petie wrote:

   Huh, I’m intrigued, but have to say that it does sound a little fishy. You’d really have to buy a lot of stuff to make up the 4500 and, I agree, why the now or never policy. That’s ridiculous. This line, “The poor woman doesn’t know that both Joey and I are fricking MBAs and have spent a ridiculous amount of our lives making a living out of understanding concepts like the present value of money and financial risk,” and the line about Joey making wisecracks, made me laugh out loud.

2. On May 27th, 2006 at 7:57 pm, Maria wrote:

   It’s so funny… Right after I published this one I looked up DirectBuy on Google and found tons of articles that only make me feel better about our decision to not get “fudged in the a_ _ ”

   I found questions on the legality of their contract, reports on them changing their business name for some type of bad publicity the got in the past, complaints from members regarding customer service, the difficulty of returning deffective merchandise, and constraints in the buying process… You’re stuck buying off catalogs, and somebody wrote that he couldn’t see important specifications on a product unless he put an order for it. I also found weird “ku klux clan” complaints from people saying that DirectBuy would not let them come for a visit if they were alone. Only couples. Somebody in California got grilled about his relationship with his living partner “Are you married or not”. What the hell???

   More importantly, what I suspected in the first place: The big savings are on really high-end items (e.g. an $8,000 sofa), which we would never buy even at a discount. So at this point, I actually feel great that we were smarter than that and didn’t give up to the ridiculous sales tactics.

3. On May 27th, 2006 at 8:22 pm, Joey wrote:

   This is the only way I woud do the Direct Buy deal for those who stumble here and are thinking of going to the sales pitch.

   1. I have a big remodeling project I am going to do NOW
   2. I have priced out the remodeling project and come into the sales pitch with a list of the specific brands and models that I am looking at
   3. The sales people go into their library and bring me the catalogs for each of their items so that I can see how much I am actually saving.
   4. I want to be saving the up-front membership of $4,530 IMMEDIATELY, or come pretty darn close to saving that. The company saves on flooring, furniture, and even sheets, supposedly…. so come in with everything you can think of. But really, the big money is potentially in new cabinets, flooring, and then maybe furniture and appliances. I am not sure as we didn’t do our own price point checking.
   5. You can get financed on your $4,500, but the interest rate is 18%. I NOT give them a penny until I got my stuff and it was in good condition. So I would add the 18% interest over 1-2 months onto my savings target of $4,500. That way if something went wrong, they wouldn’t have my money yet.

   This is perhaps conservative to some people, but I am crazy, when I give you money, I want a product in exchange, not a promise of future savings.

   There was a funny point where the sales person was trying to convince us that even though we might not use the membership much it was still worth it. I said, “lady, you may not be here in 5 years.” She said, “we’ve been in business for many years (it was a big number, like 35) and never closed a store.” I said, “That’s what Enron said.”

   Also, not that I have a great deal of compassion for retailers, but I imagine that members will go to their local furniture, appliance, carpet, or hardware store to decide what they want, and THEN go and get their deal at Direct Buy. Most people do want to touch and feel the product they are going to buy, or at least another similar product, before they buy. Would I feel guilty of shopping at a retailer and then go and buy at Direct Buy? No, but it is a vulnerability of the model. There is a chance that big retailers have enough and demand that manufacturers pull their products; and you’ve already paid your $4,500.

   One last thought. I wonder how many people finance their membership fee (by the way, the financing is supposedly automatic and completely apart from your other credit — so people with bad credit can increase their credit).

4. On May 27th, 2006 at 8:24 pm, Joey wrote:

   continued… sorry. My thought is that this concept is a way to increase consumerism even more. A new line of credit and an incentive to buy stuff so that yoy make back your initial investment. So, finance your membership fee and then further finance your purchases. Not that we would do this, but I can imagine average Americans doing so, and digging themselves into a bigger credit hole.

5. On May 28th, 2006 at 9:31 pm, BJ wrote:

   You should note the following:

   In US, a court found the membership contract “grossly unconscionable” and that “Club membership is nothing more than a cleverly disguised method of selling nothing but hopes and dreams.”
   http://www.mlmlaw.com/library/cases/mlm/state/nyniemiec.htm

   In Canada, a provincial court found the membership agreement untenable and unenforcable because it violated the Consumer Protection Act, the Sales of Goods Act, and The Trade Practice Act. Read this at at paragraphs 13-20 of the ruling.
   http://www.provincialcourt.bc.ca/judgments/pc/2002/01/p02%5F0197.htm

   Best to avoid this scam.

   http://edumacation.com/DirectBuy

6. On July 6th, 2006 at 2:19 pm, C_Rob wrote:

   DirectBuy takes advantage of people who want to believe blindly in what DirectBuy is selling. They sell you the dreamy idea of saving huge $$! They are selling an upfront “membership” without allowing you to view the catalogs. Many times they fail to advise of the shipping charges (and additional upcharges of up to 6%) and they don’t make you aware of the unreasonable delivery times. I even read that they deliver to their DirectBuy location and then you need to pick it up from them!! How inconvenient.

   Also, I read on the internet that you need to spend more than $25K-$30K just to recoup your initial outlay. (Type DirectBuy scam as a google search) and you will find thousands of complaints countrywide. Buyer beware!!!

   The reason you have to sign on the dotted line the same night of your slick sales pitch is because they don’t want you to get home and research - thus changing your mind. Most likely, the market they target figures they’ll go “take a look” and don’t research ahead. Then they fall victim to the high-pressure sales pitch and join because they might be “banned” in the future from these awesome promises of savings.

   Another kicker… I guess when they ask questions of potential suckers… they are really assessing your ability to pay. Then, when you are presented with the membership cost…. your cost may be different than another person sitting next to you in the presentation. Nice, huh?

   BTW - if you went back with a different name (maiden name maybe), or remarried some day - what do they do, have fingerprints on file so that they know you’re still banned???? Just a thought.

7. On July 6th, 2006 at 3:20 pm, Maria wrote:

   That’s the same thought I had after we got escorted out: How can they REALLY enforce the “no DirectBuy for you” policy?

   Since I posted this entry I’ve been hit on a daily basis with search queries for negative things associated with DirectBuy (e.g. complaints, scam, break the contract, etc). I can’t trust a company with so many unhappy users, so regardless of whether they’d take us back or not, I don’t want them.

8. On July 9th, 2006 at 7:11 pm, Abado wrote:

   Even as you read, this scam, which is nothing more than and a variation of the “Advance Fee Fraud” scheme, is parting yet more of the “something for nothing” crowd from their money.

   Here’s how it works: a telephone “tickler” call is made to a potential victim and an informative letter is sent afterwards inviting them to an open house so they can see for themselves how much others like them have saved and how much they themselves would save, along with some form of an invitation to join. The letter and subsequent follow-up telephone calls promise rich rewards of savings by buying direct from the manufacturer, at cost, with no Mark Up, No Middleman if only they were “members” of this so called highly esteemed and long time in business organisation. Typically, the pitch at the open house includes mention the so called fact that tens of thousands of other smart and savvy consumers have saved along with a slick selection of what they have saved on — and you, too, can begin saving as soon as you join this elustrous group by signing a “membership agreement” costing thousands of dollars payable in advance of receiving any benefits - you are told that amount is paltry compared to the savings you will obtain over a 10 year period - and you must sign the contract on a now or never basis. You are even made to feel stupid if you don’t sign - only a fool would not take advantage of the savings - spend a little to save a lot sort of thing.

   If you’re not saying “scam” by now, you should be. Should you agree to participate in this Advance Fee savings scam, something will go wrong. Savings evaporate … or.. Wrong or defective merchandise will be ordered … or … Order delays … or … Order mishaps and screw-ups. You will not be allowed to cancel your “membership” and get out of the deal.

   If you decide to order merchandise, money from you, in advance of receiving the merchandise — an insignificant sum, really, in light of the windfall of savings about to land in your lap — will be required to order merchandise without any written guarantees of actually saving money.. You pay, you wait for the merchandise . . . and all you’ll get in return are more excuses about why the order is held up and assurances that everything can be straightened out if you’ll just be patient and wait a little while longer or send a bit more to pay for this or that price increase. Once you start making threats, these scammers will threaten to sue you if you don’t make good on your end of paying for the membership contract in full.

   Beware that the Membership Agreement is in reality nothing more than a legally binding sales contract that may have been glossed over in light of all the savings you are excited about expecting. Carefully look at it - it contains NO GUARANTEES OF SAVINGS - instead there is a “NO ORAL PROMISES” clause: “No oral promises or statements not contained in this Membership Agreement shall bind or obligate the club.” It’s like a get out of jail free card - they can tell you anything pie in the sky in the open house tour or over the phone to get you to join, but once you sign the sales or Membership Agreement, you agree to the NO ORAL PROMISES clause! So what happens if it turns out not to be what you expected? Ouch. Too late. You’re stuck. That NO ORAL PROMISES clause comes back and bites you. Want a refund? Beware that the Membership Agreement states: “Members understand this program is not sold on a trial basis and that no refund of membership fees will be made.” So you only partially paid on your contract and think that you’re just not going to pay the rest of the contracted amount? — beware that the Membership Agreement states further: “Members do not have the right to terminate the Membership Agreement without paying the amount remaining for this Membership.” And if you think you’re going to get a refund because you never found anything cheaper and therefore didn’t use the club, think again. There’s a clause in the Membership Agreement about this too: “The Membership Agreement is not conditioned on the use of this Membership.”

   In a nutshell, the con works by blinding the victim with promises of an unimaginable fortune of what others like them have saved, what they could have saved if only they joined earlier, and what they can expect to save by joining now. Once the sucker is excited and sufficiently glittery-eyed over the prospect of what he or she would do with all the money he will save, he is then squeezed for however much membership fee in full at the time of “joining” or have the sales contract balance immediately financed by a separate finance company, actually a subsidiary of the parent scam company. The money the victim parts with willingly, thinking “What’s $4,000 here when I’m going to end up saving over $40,000 when this is all done?” He fails to realize during the sting that he’s never going to actually get the promised savings because all of savings are expressly disclaimed in the fine print of the contracts and merchandise ordering materials. The very sales contract, which the victim was at first eager to sign, now comes back to bite him with all those adverse terms and conditions. All of this messing around is designed to part him from his money.

   Once the scam is explained, it seems so obvious a con that you’d wonder who would fall for it. Yet fall for it people do because they’re mesmerized by the wealth that will soon be theirs in the form of all the savings by not paying any markup or middleman costs - and how smart they are by taking advantage of the join now or never opportunity. They also fail to realize there’s a hook hanging just out of sight; at first all they see is that others are getting savings and they want to join this cadre, thus they’re ill-prepared to mentally shift gears when the con artists turns the tables. Because the premise of “saving tons of money” is wholeheartedly swallowed early on, it’s not at a later point questioned when things begin to go wrong with the transaction and the dupes who have been targeted find out the hard way that there is a no refund policy on all the money they have paid in advance of receiving these now questionable “savings.”

   Beware paying in advance for something for nothing - no written guarantees of promises made should send you running - especially in light of the tactics of “Be like me, I’ve saved money.”

9. On July 16th, 2006 at 7:18 am, Chris wrote:

   Has anyone who is a member had any issue with damaged items or the inspection process. I am currently having an issue and would like to chat with others who have had similar issue.

10. On July 16th, 2006 at 10:08 am, Maria wrote:

    Chris, this other post in the blogosphere seems to get a lot of traffic. There are currently 59 comments – for the most part relating negative experiences with DB. I’m not sure if you’ll find contact information for other members, but in case it helps you…

11. On July 19th, 2006 at 10:01 pm, Ting wrote:

    Wow! Just got somebody called me from directbuy. It was exactly as the same as people posted on websites. I think because I am a cheap person. After she told me that we need to buy the membership, and she wouldn’t tell how much it would cost after I asked her, I started to relize it is a scam . I told her I don’t want to buy anything recently and go to visit there open house. She told me I could contact them later after I need to buy things. Then I went to google, typed in directbuy scam. ha… Lots of posts came out, and told me directbuy is a big scam that is totally right! Thanks for the internet that I could skip this scam and would not be ripped off!
    Here is one guy posted:

    Example of non-existent savings:

    UCC Totalhome/directbuy
    IJ8000 (washer) sells for 322.00 in their catalog, but you have
    to add 7% s&h, a freight charge and pay the GST and PST. The
    final price for the washer is therefore $ 453.77, and you have
    to pick it up at their warehouse in Gloucester!

    Sears.ca
    The same washer sells for 399.00 at Sears with free delivery to
    my house. The final cost only includes GST and PST : 458.85.

    So for $ 3000.00 your saving $ 5 on what UCC considers a major
    item. All their products seem to follow a similar pattern.
    Furthermore, if you purchase something chances are you’ll wait
    between 2 to 4 months before it is delivered.

    Sounds really stupid to join this kind of ripped off membership

12. On August 3rd, 2006 at 11:56 pm, Gerard Hall wrote:

    I am SO glad I read this post. I had an appointment today and cancelled it. I have been receiving calls from them all day and they don’t leave a message. I guess they want to reshedule I was just curious about what the due would be and there is no way I would pay anyone $4500 upfront for a MEMBERSHIP fee. when I first signed up for the open house they INSISTED that my partner come with me. Being I was just curious I was not about to drag him with me so I went back online and just used a different email address aand they gave me an appointment. Thanks for this info. I could definitely do without another “commercial” in person.

13. On August 9th, 2006 at 11:44 am, Thomas wrote:

    Went to the Directbuy “Open-House”. “Open-House” is nothing more than a slick sales presentation to get you to buy expensive non-refundable membership. Can only imagine that once you have been suckered in to buying it you would want to try to get your money’s worth. BBB investigations revealed DirectBuy purchases from the manufacturer, resell to captive members, and disguise markup as “shipping and handling”. What’s left is no savings on whatever merchandise they happen to carry at the time. DirectBuy is polished at manipulation. Beware.

14. On August 21st, 2006 at 8:56 pm, BJ wrote:

    The moment they told me “if you do not sign up right now you will never be able to join” was the give away. Right there and then I said to myself, “if it smells like a scam it must a scam.”

    BJ

15. On September 13th, 2006 at 1:57 pm, Jim Denaples wrote:

    With DirectBuy you’re better off with the straight loss of the membership. My wife and I were building a retirement home downsizing from a larger home. We order an outside dinning table with 6 chairs and umbrella. The table we chose was listed as a $4,500.00 suggested resale. Our cost was $3,050.00 prox. The table was to have a solid stone top, and extra heavy chairs (needed in Oklahoma). It was four times longer in arriving that what we were told. We got a U-Haul truck for the pick up. When I spoke with the manager I asked when a single U-Haul blanket package would be enough. He told me the stuff was in boxes. When we got there, there was a lot of paperwork. I signed an acceptance of the shipment without opening the boxes.

    When I got it home, I lost a day in opening and assembling the table. If the table wasn’t assembled how could I know whether everything was there? I brought the junk back to the store the next day. The tabletop was cement and had a spider web crack in the surface. The chairs were Chinese made and light. The merchandise we received was consistent with sets we saw at Home Depot et al in the $1,000.00 to $1,500.00 price range. I checked with Discover Card, and was told to bring the stuff back and get a receipt or call if they refused to sign for the return, which they did not sign for it the manager suggested that he could help me sell the junk. I laughed at him. Discover won’t extend a credit to us, because I thought I signed for the boxes. They claimed I inspected it–my loss. I’m, going to the district attorney’s office Thursday to file a consumer complaint charge of misrepresentation.

16. On September 18th, 2006 at 6:58 pm, Jay wrote:

    Wow, I went to a “one-time-only” offer from directbuy, and their 2-year membership up-front fee was $5,950. Earlier posts on the (internet a few years ago) was $3000. In May of 2006, it was 4500. Now in Sept of 2006, it is 5,950. We didn’t go for the membership either.

17. On September 23rd, 2006 at 2:13 pm, g wrote:

    This is a franchise, so each store can set their own prices for membership fees. We went to an open house today, and the cost was $4300 for three years, $190 per year for years four through ten, and then after that, we’d be able to renew membership for half of the then-current membership price. I can only imagine how high it would be in ten years.

    I won’t rehash everyone else’s comments (most of which I wholeheartedly agree with), but one thing that wasn’t mentioned was the concept of the “secret prices.” Anyone who’s worked in retail as an owner, buyer, accountant, salesperson, etc. knows wholesale pricing. It’s not a secret. If you have a tax ID (and sometimes even if you don’t), you can get catalogues and price lists sent to you from manufacturers. Today’s sales pitch stressed over and over again that we were learning secret information, and that we were not allowed to share it with anyone else… especially not retail stores, who would be “very upset” to learn that these “secret” prices have surfaced! What a crock.

    They also mentioned that by shopping in regular stores, we were paying “retail dues” all our lives. This was supposed to make us feel better about paying exorbitant membership fees, plus 6% markup on each purchase so that some guy getting minimum wage could paw through our purchases “to ensure that they are of the highest quality and in perfect condition.” The delivery charges are one hundred dollars per HOUR, not per delivery, and there is no possibility of getting anything other than kitchen cabinets delivered to your home directly.

    A friend tells me that a couple he knows did sign up, in Canada, and ended up paying as much as they would have from a regular store, since the membership fee was so high. Blecch.

18. On September 25th, 2006 at 3:33 pm, tom koby wrote:

    wow…its a shame to see that there’s so much hostility. keep in mind that feeling is there for a reason. “poop it out and wipe the bad taste off my mouth” from an educated person means that there were some strong feelings stored up…probably because you want something you can no longer have(the way a child acts when you take a new toy away from them). BTW when you requested your visitor’s pass, it clearly states the policies of DirectBuy and the manufacturers. i love direct buy so much that not only have i been a member for 24 years but i have pursued a long term career with them. if you have your MBA then you should understand how an “investment” works. You don’t buy a stock the day before it goes through the roof(almost impossible to predict)…you buy it with the anticipation of future earnings…or in this case savings(guaranteed). It’s funny to hear all of your “inner children” coming out. Keep pouting…you missed out on this seven years. I promise you that there is not a more cost effective way of shopping. It’s not a matter of “if” you will save your dues back, but a matter of when…think about it…no really think long and hard. unless you just stop buying things from a store, you will pay an avg of 30.3% on most goods and 43.5% on home furnishings( taken from the US census bureau). It’s simple math people…who really cares if you join when you come in….it’s for the rest of your life….HELLO!!!!!!!

19. On October 10th, 2006 at 2:47 pm, Dan D wrote:

    Glad I took the time to search the net and arrived at this site. I’m shopping for a sectional sofa looked local, searched the web — then found the direct buy links, filled out the form, then got notified that I would be contacted — and was contacted this week — some four weeks later.

    An initially confident woman on the line gave me the pitch about doing the meeting and about the membership fee and the savings and the benefits yada, yada, yada — no $ number on the membership fee when I asked — 1st clue—-

    Her tone, cadence, and phrasing immediately reminded me of the timeshare condo nonsense from the 80’s. I could just picture the routine of being surrounded by these falsely warm vultures–2nd clue.

    I must have been one of her first attempts at this ruse — because her initial confident tone evolved into a monotone delivery — which told me she was reading a script —3rd clue.

    Oh yes, forgot to mention — I am career sales guy — and its been long said never bullsh**t a bulsh***er — A good salesman (ok I’ll be pc and say salesperson) works on trust, facts, and honesty — not on intimidiation and creating false urgency. If simple questions — and in this case what appears to be a $4000 - $ 5000 question of what does it cost up front cannot be answered — Then there is a big problem in the routine.

20. On October 31st, 2006 at 10:00 am, Courtney wrote:

    You are absoulutly right about everything. The DirectBuy is a scam. When we went to the open house I did not even have to sit through the whole thing to see what a scam it is. And who even says that the prices they are selling these items for is the actual suggested retail price? Until I see some of those prices on a site that DirectBuy has not ever seen before then I won’t be able to believe what they say. And those people that they have on the videos to say that they saved lots of money using DirectBuy guess what they are just paid actors. The first time that they said you had to pay right now and could not have time to think about it was your first clue of a scam. But hey there are always those people who believe everything they are told. In fact the day we went to the open house three other couples were signed on. Along with us but we had enough sense to read the part that says you have one day to cancle your membership as long as you hand deliver the messege. Which is exactly what we did. And of course once we did that their whole attidude chaged tward us. Imange that huh? First they say if its not for you then its not for you but if you question them at all then guess what they shove you out the door and never give you a second look. If your looking at joining DirectBuy then make sure you do your homework and dont get sucked into this major scam.

21. On November 4th, 2006 at 7:41 pm, Chris L. wrote:

    I’m so glad I read your blog on these scammers. I filled out their “contact me” sheet as I thought I could get more information online but it seems like its going to be a high pressure sales pitch. Thanks!

    BTW, I see some other DirectBuy “agents” plugging the virtue on many blogs trying to defeat the bad press they’re getting. It must be a money maker though as they spam the infomercials spots almost every other night!

22. On November 5th, 2006 at 11:23 pm, brian l wrote:

    This is a huge scam! don’t do it. We did and nothing is cheaper there. there is never a shopper there! because it actually costs more after the 10-15% add-ons and S&H and storage and then more shipping (normally another 100) to your door. or spend a half day and maybe after you take off work you can pick up the over-priced crap that you just got sc______ on.

23. On November 5th, 2006 at 11:28 pm, brian l wrote:

    By the way Tom Koby , you are WRONG! I am the good doctor reporting.
    It still is a scam.

24. On March 23rd, 2007 at 9:34 am, Kris wrote:

    Stay away from this scam…run, run, run! This is exactly like “Doralco,” which, as newlyweds in 1982, my husband and I were scammed into joining. We had very little money at the time, and had to FINANACE the $800 membership fee, which we paid on for 3 or 4 years, if I remember right. The kicker of it is, we bought a coffee table and two end tables (for very little less than the department store price, I might add…not much of a bargain) and then DORALCO went out of business, never to be heard from again, and we were out our membership fees!! Worse still, we were still obligated to finish paying off the $800 after Doralco was long gone since we had financed through a third party. I don’t think DirectBuy will stay in business long, and then they’ll be gone with all the membership money people have paid. We were so embarrassed after we’d joined that we didn’t tell anyone right at first. By the time we mentioned it to my parents, they told us (rightly so) that we legally had 3 days to cancel that contract. How I wish we had mentioned it to them sooner. We would have marched into that office and ripped those papers to shreds. I still get mad when I think of this. These people prey on young couples who easily fall prey to their slick sales pitch.

25. On June 2nd, 2007 at 8:50 pm, Gayle wrote:

    Thanks for your direct buy blog. We were “sched” to APPEAR for the yadayda…..i know my husband would have never made it though a video re-cap. We are older established and looking to buy 5 flat screens and a dinning room table this weekend. We really hate to shop around and thought this could be a great way to escape the Costco, outlet compare shopping spree. I am so glad I was able to read your note; at least we get our 1% plus back at Costco and can return with a 1year return/warranty. I wonder if direct buy offers any thing close or if that would be an ADDITIONAL FEE. ha Sounds sketchy to me and there will be 2 less pigeons with $4500 to spend on flat screens. Your comrade against corporate scams…..keep up your site it’s beautiful.

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