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Living on a Budget
by Ron Burley, AARP en Nuevo México, January 7, 2009
Consumers certainly took a beating in 2008. The really bad news is that with increasing bankruptcies and thinning profit margins, the forecast for 2009 doesn’t look to be much better.
My New Year’s resolution as your consumer advocate is to help you avoid becoming another sorry shopping statistic.
Now you’ll have to do a little work and have a little patience for my resolution to come true. The payoff could be many stress-free hours spent with your family or engaged in your favorite pastime, time that otherwise might have been spent hassling with customer service agents. And, of course, you could wind up with a bunch of extra money in your wallet.
I’m basing my recommendations on the thousands of letters from AARP members that we’ve received during the last 12 months. While many relate horrific stories of poor products, shoddy service, and outright scams, many of these calamities might have been avoided with an iota of insight and a pinch of preparation.
Here’s my prescription to help you stay hassle-free in 2009.
1. Don’t fall for the promise or the pressure. A lot of folks write that they were “just looking,” but ended up buying a product or service that they really didn’t need, understand, or want.
From dating services to Web-hosting sites, we’ve received reports of readers who were victimized by slick presentations and salespeople making outrageous—and undocumented— promises. Don’t think you’re immune. These guys are excellent at building up the excitement and making you think that you’re going to be the next Donald Trump.
How can you protect yourself? Never buy any product that costs more than a couple of hundred dollars on the first visit—even if the salesperson says the deal will be “gone tomorrow.” In 99 out of 100 times, it’s a lie. Nothing is leaving the planet. What kind of relationship can you have with someone who is lying to you from the start and unwilling to give you a chance to be fully informed?
If you can’t have enough time to check references and closely read the documentation, you have to walk away. More often than not, you will dodge a bullet.
2. Don’t pay for services in advance. The biggest losses we heard about in 2008 were situations in which people paid up front for personal services. One couple wrote a check for more than $15,000 for a three-year Web-hosting contract. Another woman shelled out $5,000 to a cosmetology clinic. A matchmaking outfit took one AARP member for more than $8,000 and never set up a single date. Talk about heartbreak.
The basic rule of thumb is that you should never pay for a service in advance. If there’s an initiation charge, it should not exceed more than three months of the expected monthly fee. The logic is simple: If you’ve paid them all their money up front, what’s their incentive to provide you with good service?
Your only real leverage in a service situation comes from being able to walk away if you’re not satisfied. Even if the payments are monthly, steer clear of multi-year contracts that don’t let you cancel if you’re not satisfied with the service. Once again, if they know you’re on the hook, they’ve got little reason to go the extra mile for you.
3. Know your way out. Another big problem we saw last year involved products that folks couldn’t use or that didn’t perform in the way they were told or expected.
To be fair, most of us have made purchases in which we weren’t quite sure the items were a perfect fit, the exact solution to a problem, or something we’d really use. Before making any commitment to purchase a product or service, you need to ask yourself the question: “How long will it take me to honestly evaluate whether this is the product or service that can solve my problem?”
If you’re buying a new mattress, you might need a week to see if it’s truly going to give you that perfect night’s sleep. You might need to run that hedge trimmer through a few blackberry bushes to see if it’s got the power the salesclerk promised. A few showers might be necessary to find out if that “color-safe” shampoo really is.
Once you’ve decided how long you’ll need, make sure that you can return the product or cancel the service beyond that date. If the company is not willing to give you the time you need, then your best bet is to shop somewhere else.
4. Get it in writing. As the old saying goes, “a verbal contract isn’t worth the paper it’s printed on.” Some of my biggest professional frustrations this past year were when I knew the reader was in the right but couldn’t prove it because the promises the company made weren’t in writing.
There is no situation so time-critical that someone can’t take the time to write down what is said or to read an agreement in order to make sure that what they’ve been told is found somewhere in black and white. Without the promise in print, it’s your word against their word—and they get to decide who wins. Who do you think comes out on top in that exchange?
Along those lines, if you’re ever told to “just trust me” or “it isn’t in the contract, but we’ll treat you right,” don’t do the deal. In fact, run away—fast! People who tell you those things don’t have your best interests at heart. Let me clarify that: No company has your best interest at heart. You have to protect your interests. Don’t trust them to do it for you. They won’t.
If you get the deal in writing, take it home and read it (ALL OF IT!), especially the fine print. Read all agreements as if you were the seller who was looking to take advantage of you, the customer. I guarantee that you’ll be surprised at what you find.
Here’s wishing that your 2009 is free of consumer hassles, customer service conflicts, and refund nightmares. Happy New Year!
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