This article is reproduced here without permission under the Fair Use Doctrine. It was originally published at http://wcbstv.com/seenat11/local_story_135210040.html and is © MMVI, CBS Broadcasting Inc.
Kirstin Cole
May 16, 2006
(CBS) NEW YORK "Imagine what it would be like to buy high-quality, name-brand furniture."
Have you seen this commercial? It's for DirectBuy, a national company with more than 100 individually owned and operated locations, many in the tri-state area.
They sell everything to makeover your home, with promises of up to 60 percent savings on some items, luring in customers. Because the stores and their hidden mark-ups, they say are eliminated, you have direct access to thousands of items, like furniture and kitchen cabinets in DirectBuy's catalog showrooms, all at insider prices. But there's something they don't tell you about in the commercial and that's their large membership fee.
BJ's Wholesale Club charges $45. Costco costs $50. But at some DirectBuy locations, a three-year membership is as high as $4,600. So you'd expect huge savings, right? Elsie Roman of the Bronx said she signed up looking to buy a bedroom set at DirectBuy of Westchester.
"So far, we haven't saved anything," said Elsie, who added she couldn't find any bargains for what she was looking for at DirectBuy.
Craig Osetek of Sussex County, N.J., wanted a flat screen TV, lawn mower and an outdoor shed from DirectBuy of Morris County.
"No matter what I tried to get or tried to price, I could either not get it or find it cheaper locally," Craig said.
And Christa Lloyd said promises of huge savings on new kitchen cabinets in Dutchess County fell short.
When asked if saving a little more than 10 percent was worth it, Lloyd said, “No.”
Dissatisfied customers on the Internet also complain of hefty shipping and handling charges and long delivery times. So why do so many sign up? Customers we spoke to blame high-pressure sales. We went undercover, posing as New Jersey shoppers, at a DirectBuy open house in Randolph, N.J.
The sales pitch was pretty persuasive but it was also pretty expensive and when we wanted to take some time to think about the offer, the salesperson explained we couldn't. She said it was to prevent us from leaving with DirectBuy's low prices and asking a local retailer to match them. But marketing experts said be wary of these types of buy or die sales tactics.
“It is an indication that there is maybe less value for customers than what the company is proposing,” explained Peter Golder, Professor of Marketing with NYU Stern School of Business.
Flipping through a DirectBuy catalog, we did indeed find items that were a fraction of the retail price, like a Solaire Grill, but we also found items like a chainsaw and this Motorola cordless phone, for less on the Internet.
In a statement, DirectBuy said, "…we pride ourselves in member satisfaction." And the Randolph, N.J. store, "…has a strong membership renewal rate."
Craig did get a good deal on a new shed and a new lawnmower but not from DirectBuy. The New York City Department of Consumer Affairs said they are currently reviewing consumer complaints filed against DirectBuy to ensure the company is complying with city law that prohibits deceptive business practices. However, DirectBuy has been in business since 1971 and has many satisfied customers, as well as an overall satisfactory rating with the Better Business Bureau.
Membership in clubs like this may be beneficial for some consumers. The following are guidelines on what to look for from Consumer Affairs:
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