08 January 2009

This is a scam

I'm filing this one under "how-to," as in how to avoid being scammed. I retrieved an e-mail bearing this coupon from my spam filter on Monday and I just want to do a little public service here.
Direct Buy is a scam. Their entire business model preys on the general public's ignorance of commerce to fleece them all the more. If you agree to pay them a several thousand dollar membership fee, they will help you bypass supposedly predatory retail mark ups. But I have a dog in this race, so rather than blow a lot of hot air I'm going to turn this over to the kids at Consumer Reports. To wit:
To evaluate the pitch, we went undercover at two DirectBuy franchises in New York. Both gave us the same hard sell and offers of up to 70 percent off retail prices if we were to join. Only after an hour and a half of sales pitches and video testimonials from members did we learn the membership fee: $4,900 to $4,990 (plus tax) for three years and then $190 a year for seven more. Financing is available at 17.75 percent.

After the fee disclosure, we discovered that we had to sign up on the spot or never come back. We couldn’t bring DirectBuy’s “confidential” prices elsewhere to comparison shop, the representatives said, because this would likely anger retailers who might then retaliate against the manufacturers by refusing to sell their merchandise.

The fine print in the DirectBuy contract says you cannot return items, cancel orders, or terminate your membership. When we asked if, after plunking down $5,000, we could cancel and get a refund, a salesperson said, “You’ll have to check state law.” A review of New York state law revealed that the three-day cooling-off period for canceling contracts wouldn’t apply in this case.

Tacked onto the cost of merchandise—which you select from catalogs since DirectBuy has limited showrooms—are a 6 percent handling fee, shipping fees, and tax. Goods are typically shipped only to your local center, so you might pay additional fees to actually get your new stuff home.

All of this hoopla and added expense so that you can buy stuff at what end up being typical retail prices. Don't believe the hype. Do yourself a favor and study before you make a major purchase or better yet, train yourself to shop for value instead of price. Do all of that yes, but for the love of God, stay away from these people.


  1. There is a home here in suburban Chicago that has a huge sign on the side of it facing a 4 lane road that says, "We had a bad experience with DirectBuy!"

  2. Would that they were an isolated case.


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