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Don't Get Short Changed: Be Aware of Vending Machine Scams

8/8/2002

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In tough economic times, consumers often look for ways to supplement their income. The Better Business Bureau warns consumers about help wanted ads that promise large profits for little effort servicing automatic vending machines or display racks. Although some business opportunities that offer servicing vending machines or display racks are legitimate, many are not trustworthy. Potential investors should get all the facts or they may end up being short changed.

Although some ads convey the impression that the advertiser is offering a job, the actual propose is to sell equipment and merchandise. Many advertisements fail to disclose that vending machines are even involved in the offer. They mention vague generalizations about an "opening" or a "money-making opportunity" rather than disclose that the proposition is for the outright sale of machines for which the purchaser assumes full responsibility.

People responding to such ads usually receive by mail, email or telephone, invitations to meet a representative of the company. At the meeting, a salesperson will paint a glowing picture of the profits that can be made, and typically, the salesperson will apply pressure for a quick decision to prevent a careful study of the offer.

The following are some common tactics fraudulent promoters might use:

  • Inflated profit projections, including elaborate charts that may have no basis in fact.
  • Locator services, in which the company claims to employ an expert locator to find prime locations for its machines. The service usually ends once any establishment willing to have a machine on its premises is found, regardless of how many potential customers that area attracts.
  • Training programs that are generally superficial or non-existent. And it should be noted that it is impossible to learn to be a successful vending operator in one or two weeks from an out-of-town salesperson.
  • "Good deals" on machines, which may turn out to be machines sold for two to three times their actual value. Potential investors should be wary of buying any machine that they cannot look at in person since catalog pictures and descriptions may not tell the whole story.
  • Repurchase plans, in which vending promoters offer to buy back inventory from the investor. Unfortunately, the promoter is usually long gone by the time an investor tries to exercise this option.
  • Guarantees offered by sales agents often are worthless because the agent cannot be located and the manufacturer will not honor them.

Before investing your money in a business opportunity, check the company out with the BBB. And, keep in mind that promoters of fraudulent business opportunities are likely to use high-pressured sales tactics to get you to buy. If the business opportunity is legitimate, it will still be around when you are ready to decide.

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