You’ve probably seen the ads on TV and the Internet - ads featuring happy couples gushing about saving thousands of dollars on home furnishings. They’re talking about Direct Buy, a company that claims to cut out the retailer’s markup by helping members buy directly from manufacturers. Sure sounds like a great deal. And a lot of customers seem to love it.
But Marketplace was hearing from unhappy Direct Buy members. And when we started digging we found plenty of customers contacting Better Business Bureaus, even provincial governments. Customers like Mitzie and Larry Wasyliw, in Calgary. They saw the Direct Buy ads on TV and went to an open house to find out more.
What they weren’t expecting: A thee-year membership to Direct Buy costs about $5,000 (they don’t mention that in the ads). And worse yet, Mitzie says, she felt pressured into signing on the dotted line. She wasn’t ready but says the sales rep told her if she didn’t join up that day she’d never get another opportunity. So, they bought in – and instantly regretted it. “In thirty years of marriage I thought I could have divorced Larry for the decision he made,” she says. “Because I did not intuitively feel good about it at all.”
And when we talk to other Direct Buy customers, they tell us they felt pressured by the pitch, too. Risky stuff because most provinces don’t have a cooling off period to allow for buyer’s remorse. Direct Buy told us they do have a “three-day cooling off policy”, but no one at the open house we attended mentioned that, it’s not in the contract and none of the customers we spoke to had heard about it, either.
When Mitzie tried to use her membership to order window blinds she got frustrated. She says staff weren’t knowledgeable. “If you value your time there is no savings,” she says. On top of that, there’s an extra delivery charge to get items from Direct Buy to your house, products can take up to six weeks to arrive,and there are hefty shipping fees of up to 25 per cent of the price. On top of that, there are often handling fees that tack on another eight per cent to the price, and if there’s a problem with a product customers have to deal with the manufacturer, not Direct Buy.
At Simon Fraser University, marketing professor Lindsay Meredith says in today’s economy people should be able to drive hard bargains at the store – and save the $5,000 Direct Buy membership fee. And what does he think about pressuring a customer to buy? “This kinda pitch is a clear signal to hit that door running.”