By Sage McHugh on January 29, 2010 in
You've probably been bombarded with TV commercials for Direct Buy lately. According to its website, this nationwide buying club allows members to purchase items from over 700 manufacturers at a discount. A steep, upfront membership fee of nearly $5000 gives you access to a catalog of home improvement items for three years. Direct Buy claims that members will save 25 percent on all purchases.
Two staffers from ConsumerReports.org went undercover at two Direct Buy locations in New York. They were surprised by the pushy sales pitch, and were informed they "had to sign up on the spot or never come back." Direct Buy wouldn't allow them to see what products were available or compare prices before they joined.
ConsumerReports.org points out some details hidden in the contract's fine print: Customers cannot terminate their memberships, cancel orders or return products. In addition to the cost of merchandise, there is a six-percent shipping and handling charge, as well as tax. In addition, orders are usually shipped to a Direct Buy showroom, so you might have to pay even more to get the items home. (Note that this story was published two years ago; Direct Buy may have changed or improved its policies since then.)
When comparing Direct Buy's prices to other online retailers, ConsumerReports.org found that electronics and appliances "were often only slightly better than those at online retailers and in some instances higher." They were impressed by the significant discounts on flooring and high-end furniture, but they saw the same Kohler faucet on another website for $300 less.
In its defense, Direct Buy responds to ConsumerReports.org's investigation, calling the story "misleading, inaccurate, and irresponsible." Direct Buy insists that the company saves its members over one billion dollars per year, and 80 percent of customers voluntarily renew their contracts. According to this statement, new customers are allowed to cancel their contracts within three days in some states, including Ohio.
It's also important to note that Direct Buy's corporate headquarters receives an A- rating from the Better Business Bureau. About 30 complaints are reported here, but Direct Buy has resolved all of them. Since Direct Buy is a franchise business, customer service and satisfaction can vary in different locations.
We found a lot of negative comments from users on RipoffReport.com, GardenWeb.com and BradsBlog.net. About 220 consumers have posted complaints about Direct Buy on RipoffReport.com. The majority of users say the savings don't outweigh the exorbitant membership fee. In a lengthy thread on GardenWeb.com, do-it-yourself home remodelers discuss their experience with Direct Buy. Most of them are very disappointed, but a few say they saved a good chunk of money -- especially on high-end merchandise. Close to 500 users weigh in at BradsBlog.net, and almost all of them voice the same complaints: an aggressive sales pitch, poor customer service, and lack of savings on the consumer's part.
Based on our findings, Direct Buy won't likely yield much savings for the average consumer. As ConsumerReports.org points out, "you'd need to spend more than $20,000 just to recoup your membership fee." However, ConsumerReports.org notes that Direct Buy might be a worthwhile investment if you're embarking on a major remodeling project.