Buying Clubs

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Buying clubs (sometimes also called buying plans) often promise free or deeply discounted products. Once you've signed up, they send you products automatically until you cancel. Some clubs charge you a monthly fee in exchange for the right to buy products at supposedly discounted prices. Before you sign up for a buying club, research the company, look for other people's experiences, compare prices with those of other retailers, and read the terms of the offer. Consider whether you're likely to save any money buying through the club,  or just get products you neither want nor need.

 

WHAT IS A BUYING CLUB?
No, we're not talking about warehouse stores you join to buy products in bulk.

Buying clubs are something you sign up for and “shop” at until you cancel. You might join by signing up for a free or discounted offer, like 10 free CDs or 5 books for $1. Whether it’s truly a deal is in the details.

There are three common types of buying clubs: one tells you when a product is coming; one doesn’t tell you when a product is coming; and one charges you for membership automatically.

 

CLUBS THAT TELL YOU PRODUCTS ARE COMING
These clubs are a form of “opt out” shopping. You have to say no if you don’t want to buy what the club is sending. If you don’t reject the item, you get the product automatically.

The companies that operate this way need to follow some specific rules, spelled out in the FTC’s Pre-Notification Negative Option Rule: they must have clear, prominent information in any promotional materials you use to enroll. A company must tell you:

Two important things to remember:

I WANT TO CANCEL
Some clubs require that you spend a certain amount of money on products at the club's regular prices before you can cancel your membership. They should tell you that from the beginning. If they don’t, and you want to cancel your membership:

 

CLUBS THAT DON'T TELL YOU PRODUCTS ARE COMING
These clubs are often called continuity clubs. There’s no heads up before the merchandise is sent. You get the products or services automatically until you cancel your “membership.”

Some continuity clubs have an “approval period” or “free trial” so you can try something out. If you keep the product or don’t cancel the service before the free trial ends, you become a club member. Other clubs bill you for items — for example, flowers, books, movies, or software — when you get them. If you use your credit card when you enroll, the company may charge your card each time they send something.

 

CLUBS THAT CHARGE MEMBERSHIP FEES
In a third type of buying club, the monthly membership charge is automatic. Your fee gives you the ability to get what the club describes as discounts.

Some people have told the FTC that they didn’t know they were enrolled in this type of club until they noticed charges on their debit or credit card statements. They thought they were paying a $1.99 shipping fee for a free trial. Actually, they were agreeing to be enrolled in a club that would continue to charge them, regardless of the purchases they made. Read “Free" Trial Offers? for more.

 

HOW TO DECIDE

Before you join a buying club:

    
If you would like help finding out more information on a particular company, feel free to contact the Attorney General’s Office, Division of Consumer Protection www.consumer.sd.gov or 1-800-300-1986.