A few years ago, just after we bought our house and had put a LOT of money into remodeling parts of it, we got some info on DirectBuy and decided to check it out. The Free pass basically is an invitation to come and sit through their sales speel (a really long infomercial) and then you sit down with one of their sales people who attempt to convince you to join DirectBuy. The showroom is really just a catalog warehouse (and by that I mean a warehouse of catalogs) with a few products scattered around with signs to show you the MSRP on the item and then the price if you buy through DirectBuy.
I won't say exactly how much the membership is but let's just say it's 4 digits (before the decimal). It's been a few years so it may have gone up or down now. The idea is that you save money by cutting out the "middle man" and ordering directly from the manufacturer, via a catalog.
The upside is that yes you can save a TON of money.
The downsides are plentiful (imo)
- It's a lot of work - you will basically have to know the exact model # of the item you want and then find it in a catalog in order to place your order.
- It can take up to 8 weeks or more to get your items.
- You will pay shipping.
- The biggest discounts are on higher end items.
- You will have to spend a lot to recoup your initial investment.
We did join but we ended up losing a good bit of money. We only ordered 3 things through DirectBuy that I can remember.
Flooring - we got a great deal on flooring, getting close to 50% off some Bruce hardwood.
Refrigerator - we tried to order a refrigerator, only to be told 2 weeks later that it was no loner available. We ended up going to Lowes (in the same time-frame we also replaced pretty much every other major appliance in our house (none of which did we get through DirectBuy - we just weren't buying high end enough to make it worthwhile).
A Bosu Ball - I saved about $20 on this item from the best price I found locally. I ended up waiting about 3-4 weeks for it arrive.
Had we joined a few months earlier, I know we would have made better use of the membership. When we joined we were not allowed to look through the catalogs before joining, all we could do was let them look up a specific item. As it happened, we'd just purchased the faucet sets for our bathroom and I still had the item # on my phone. When they looked up this particular item the cost through them would have been a fraction of what we paid (and I got it through my uncle who passed on his employee discount at a local plumbing supply).
Saving money often means spending time (and vice-versa), the case of DirectBuy is no different. You can save some money if you are willing to put out a lot of time and energy.... and if you are doing some MAJOR projects. But, if you aren't doing major projects and you aren't willing to put in a major time investment, then I wouldn't suggest joining.
Our membership expired over a year ago and I doubt we'd rejoin, even though we do plan to remodel our kitchen at some point in the future. We'll find other ways to save money on the project, but we don't think that the monetary investment to join DirectBuy and the time we'd have to invest would be worthwhile (for us).
Thanks for the info! I always see those commercials and my mom is always telling me to go there, but I knew there would be some kind of catch - I just didn't know what it would be. Now I can tell her to stop yelling at me for not going there! Last week we ended up driving 4 hours to Ikea because it's cheaper to drive there than buy crappier, more expensive furniture here in Las Vegas.
ReplyDeleteI like giant showrooms - I wouldn't want to just look through catalogs! I ended up buying some of my home improvement stuff online (like glass kitchen tiles) and just ordered a few samples before I placed the big order. And almost all of my lighting fixtures came from online, where I could shop around for the best price.
I like real showrooms too. I like to touch things and really see the details, something you can't do online or in a catalog.
ReplyDeleteYes, you are right; it's a scam:
ReplyDeleteHere's how it works: the potential victim is baited to call for more information after seeing a tempting infomercial and how on the "inside" someone can get better deals or a telephone "tickler" call is made to a potential victim and an informative letter or brochure 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."
ReplyDeleteIn 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. All the while the con artists are keeping certain important information secret from their intended victim, so 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 $5,000 here when I'm going to end up saving over $50,000 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.
The scam involves their very effectivly hiding the fact that not all savings are passed on directly to members. This is accomplished by the franchisEE agreeing in the franchise agreement (the terms of which are unknown to the victim member) that the franchisOR can keep all discounts and rebates and not pass them on to the member. It is only by reviewing the 260-plus page agreement with the franchisOR that the victim would every learn that the franchiseOR reserves "the right to keep rebates, discounts and other payments from manufacturers and suppliers." They also keep early-pay disccounts and all members' purchases are paid by the member at the time of ordering. All of this messing around is designed to part the victim from his money. This marketing scheme is now the subject of a number of class action lawsuits around the country.
ReplyDeleteOnce 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'm a member and I've saved money." -- You may not!
http://edumacation.com/DirectBuy