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Buying Clubs

The Better Business Bureau periodically receives inquiries regarding firm that are selling "memberships" which they allege will enable individuals who join to buy merchandise or services at substantial discounts by dealing with merchants, suppliers or service providers who are also "members" and/or who cooperate with the organization. In such organizations, the "member" consumers and the "member" merchants are often required to pay an annual fee to the buyer's service company, and it is from these fees that the organization makes a major portion of its profit. Also, in some cases the buyers service firm may receive fees from merchant "members" based on a percentage of the amount of sales made to consumer "members" of the organization. Prospective purchasers of "memberships" may wish to consider the following when evaluating such promotions: DISCOUNT: The term "discount" is not meaningful, unless you know the basis of the price from which the discount has been taken. Commercial firms are in business to make a profit. Prices they pay and charge for merchandise are based on many factors such as overhead, volume, services to be included or omitted, guarantees, installation, etc. When considering the purchase of merchandise from any source, consider the quality of the product/service, as well as its price. Comparative shop among other retailers or service providers to determine who is offering the best value. CONTRACT: Read carefully and understand provisions of any contract to make certain that the investment under consideration represents a legitimate value. Benefits, obligations and responsibilities applicable to the company and to the purchaser should be evaluated BEFORE assuming obligation. The location of service providers is also an important factor and if you have to travel to the location to take advantage of any discounted services. In addition, take time to verify the company's reliability, length of time in business, and the experience of past and present "members" in the organization.

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