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Comparing Costco and DirectBuy

One post which keeps appearing on my visitor logs–as a search term and a visited post is my piece on whether to DirectBuy or not to DirectBuy.

Since there’s so much interest and my friends just went on a trip to Costco, I decided to do another piece on it. You see, I think DirecBuy is essentially masquerading as a Costco-like place, but is quite different.

In the other post on DirectBuy, I noted that it wasn’t a scam. But I think it’s shady. You pay a membership price, you visit the store, and you get discounts on certain items. That part’s not shady, and it’s true that you will get discounts (some of the time) if you join. However, there’s some big caveats here.

The Consumer Reports Blog did a piece on joining DirectBuy, the pressure tactics used at two locations, and the lack of savings on certain items. For example, they signed up and found that some thing (particularly electronics) were priced higher than at other stores.

DirectBuy seems to market itself like other savings club stores, such as Costco, BJs, and Sam’s Club. It’s certainly similar, but I think there are insidious differences which make DirectBuy a bad buy.

  • Similarity: Both require you to buy a membership.
  • Difference 1: Secrecy.

My friend EB has a Costco membership. I’ve been shopping with her. I got to come in the door, compare prices, whatever I wanted to do (I can’t get in without a card-carrying member, but I think I might if I were considering a membership and didn’t buy anything).

At Direct Buy, you can’t do comparison shopping, at least not before you buy a membership. I could evaluate Costco’s claims, but with DirectBuy, you’re taking it on faith.

  • Difference 2: Hard sell.

The Consumerist investigators and many other people online have reported you only get one chance to join. If you don’t join then and there, you can’t ever do it. (So you’re told.)

Can you get your money back? It’s hard to say–some people report being told they have a decision period but “the fine print in the DirectBuy contract says you cannot return items, cancel orders, or terminate your membership” (Consumerist).

At Costco, on the other hand, I didn’t have the join when I went with EB (I wasn’t actually shopping, but we were going somewhere else next). I could have joined if I wanted to. Or I could have come back later. And I could have made a price book and taken it to my local supermarkets for comparison.

If you’re looking for discounts, you could do worse than go with DirectBuy. They’re not an out-and-out scam. But it’s a bad idea if you’re not buying much (membership is quite expensive, so you’d have to save over $4-5 thousand for it to be worthwhile). And it’s a bad idea if you don’t comparison shop after buying it…because even if you threw a few thousand down the hole, you don’t want to follow it with more by not comparison shopping.

Someday, depending on distance and the number of kids I have, I might join Costco. Or Sam’s Club. Or BJs. If I ever join DirectBuy–smack me with your anti-zombie cricket bat.


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November 10, 2008 at 7:01 am
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{ 5 comments… read them below or add one }

mapgirl December 10, 2007 at 11:10 am

Your link to the Consumerist is actually to Consumer Reports. Very different.

Interesting article though. Friends of mine were considering becoming DirectBuy franchisees. Now I’m not sure it would have been a good idea. I wonder if the model numbers are the same with DirectBuy stuff as with other retailers, because you know that’s the scam with mattress companies. They change the model numbers so you can’t ever get a 1-to-1 match and get a price adjustment per their guarantees.

Money Blue Book December 10, 2007 at 11:44 am

Do they offer very good prices though (above and beyond everyone else)? If so, I can overlook the secrecy and hard sell.
-Raymond

Dad December 10, 2007 at 5:29 pm

With both BJ’s and Costco, I was allowed to window shop. That is, without membership, they allowed me to browse the store but not buy anything. I actually took notes at BJ’s so I could check against other places. I decided that I wasn’t buying enough of the stuff that Costco offered to make it worthwhile and I didn’t have the storage to buy the quantities needed to benefit from BJ’s. I know others who have found each store to be a benefit. But I appreciated their openness is marketing.

mrsmicah December 10, 2007 at 6:22 pm

Consumer reports thinks not, Raymond. Other people have complained of this as well. Some people have gotten good deals with them, but lots haven’t.

Good catch mapgirl. I had links to both of them in the other piece and got that mixed around. :) editing time!

MIKEY November 8, 2008 at 11:41 am

DIRECT BUY IS A SCAM – BUYS OUT INFOMERCIALSCAMS.COM TO COVER ITS TRACKS !

infomercialscams.com was strong-armed by direct buy and had to remove nearly 1,000 complaints about the direct buy scam. Why you ask. Cause when you google ‘direct buy’ the informercial scam site was ranked #2 by google. All that is left on the site is the fake reviews by direct buy. I would say to be very careful with dealing with a company that is afraid of what it customers post about it on the internet. This company is a scam. Go there, read the contract, its all in the contract. The contract basically states that direct buy is bound to nothing and you are bound to paying the $5,000 member fee. SCAM SCAM SCAM SCAM SCAM

fortunatly, the postings on the net never go away,

just check archives

http://web.archive.org/web/20080203104709/www.infomercialscams.com/scams/direct_buy_scams

is this starting to sound like organized crime ?

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