Buying Clubs
Have you been approached to join a “buying club?” Think twice and check the fine print carefully.
Buying clubs promise to use their members’ collective purchasing power to get low prices on goods and services. You pay an upfront fee for the right to buy goods or services through the club.
The clubs claim they will save you money and, in some cases, they do. On the down side, you might find yourself committed to spending thousands of dollars more than you ever intended – or can afford.
Check cooling off period
It’s important to note that there is no cooling-off period for buying club memberships, unless it’s specifically provided for in your contract. So read your contract and know what you’re getting into.
How should you handle a buying club offer?
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Don’t rush into it. If the deal is good today, it will be good tomorrow. Don’t be taken in by pitches that require you to sign on the spot with no time to investigate the offer.
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Look closely at membership fees. A large fee means you’ll have to make many discounted purchases before you save any money. Let’s say the club wants you to pay $4,000 in membership fees up front. If they deliver an average discount of 10 per cent, you’ll have to spend $40,000 with them before you make back the cost of membership. Even if they can get you a 25 per cent discount (by no means a sure thing) you’d still have to buy $16,000 worth of stuff before you’d break even.
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It is also important to check terms carefully. In many cases when you order through a buying club you have to pay extra charges for insurance, shipping and handling. These extra charges may wipe out any savings from regular retail.
- Check a buying club’s reputation with the local Better Business Bureau and on Ontario’s Consumer Beware List. Search by company name or by category, “Buying Club.”
