Sat through one of these presentations with my wife a couple of years ago. Didn't know anything about it going in, but it's clear they prey on old people who aren't good at spotting scams. A few red flags that pretty much confirmed it was a scam:
1. The membership is $5,000 or so, and they want you to buy that day. You are not allowed to go home and sleep on it. They tell you that this is your only invitation, and if you walk away you will not be invited back. (I don't know how true that is since I've been getting spam phone calls to my landline from them for years)
2. They won't let you look through their catalog. In the presentation, they'll show you tons of vague examples of savings, comparing their price to MSRP of things like furniture and building supplies. Hint: Nobody should be paying retail for that stuff anyway.
At the presentation, I wanted to get pricing on a few specific items that I saw in their warehouse. I was curious because I'd either just bought them or had recently priced them online and in places like Lowe's. It would have been a perfect apples-to-apples comparison for a big remodeling job I was planning. The salesman left, claiming he was going to see if that would be possible, but all he really did was send another salesman over to help close. This is a tactic frequently used in sales, especially in cars. If you've been negotiating for a while and the salesman has worn you down as much as he's capable, he will send in a new closer to take his place, sort of a good cop/bad cop strategy.
They have a scripted excuse for not showing people their product listings -- It's because these evil manufacturers/retailers don't want everyone to know they can get much better deals through directbuy because it would hurt retail too much. Sounds plausible, sure, but I'm not going to take their word for it.
And they say they are targeting only those with a certain income level, but then they offer you this payment plan. There's no credit check (they tout this as a major selling point), so everyone who chooses the payment plan gets a fixed interest rate of 18% or something outrageous like that.
Oh, and the free gifts:
1. The hotel stay -- we never redeemed this because the info sheet had enough restrictions for us to determine that we wouldn't be able to do it in the timeframe allotted. We never bothered to call or register or anything, so I can only imagine the additional hoops one would have to jump through.
2. The restaurant gift card -- It's a gift card to restaurant.com, which is a website that sells gift certificates to certain restaurants. For example, $5 for a $10 gift certificate to some wing place or whatever. The gift certificates are in low amounts like that, and the terms and conditions say you can only redeem one per party per visit, so don't expect to be able to get free steaks and wine at Ruth's Chris or something.
If DirectBuy is really a good "product" that's worth the high price, they do an extremely poor job of convincing the young, savvy demographic such as myself. It could very well just be a case of good product/bad sales tactics. Kind of like the Rainbow vacuum. I know the vacuum is good, but they're sold door to door, and the company allows their salesmen to use dishonest tactics to get you to watch a demo. Turns me off right away.
This post was edited on 6/18 at 12:56 pm