Have you ever felt cheated by a company? It can happen to anyone. And although many companies focus on resolving customer problems, other companies ignore customer complaints. When this happens customers often feel helpless, thinking: “I’m just one person; how can I get the attention of this big corporation?”
Enter the Better Business Bureau (“BBB”). This non-profit organization, founded in 1912, tries to keep markets fair by increasing trust between buyers and sellers. To accomplish this, the BBB rates businesses on a scale of A+ to F. The BBB gives high ratings to companies which build trust, advertise honestly, tell the truth, promote transparency, honor promises, respond to customer complaints, protect privacy, and embody integrity. Though companies have no obligation to work with the BBB, many seek a rating from the the BBB in the hope of attracting new customers.
The BBB considers 16 factors when deciding how to grade each company, including the number of complaints lodged against a business. By tracking and resolving customer complaints, the BBB gives customers the power they need to challenge corporate practices. Though the company may not care about losing a few customers from its bad service, it could lose many customers if its BBB rating falls.
How the BBB can help:
The BBB provides three useful tools for consumers. First, consumers can use BBB ratings when deciding which companies to do business with. For example, a consumer who is searching for a contractor might type several names into the BBB’s website and choose the one with the highest rating. Consumers can generally assume that businesses with a high BBB rating will be honest, respond to complaints, and act with integrity. Further, a good rating from the BBB suggests that the company has not had many complaints lodged against it.
Second, the BBB gives consumers another avenue to resolve complaints. Consumers are almost powerless when a company refuses to respond to their complaint, but the BBB turns up the pressure on companies to respond to individual customers. The BBB can also provide mediation and arbitration services which can help resolve customer complaints, even when the company has been hard to deal with. The BBB reports that it helps parties settle almost 80% of the customer complaints it receives.
Finally, the BBB can keep companies accountable. A company who is accredited by the BBB might try harder to resolve your concern, knowing that your dissatisfaction could affect its rating. Say, for example, that a company with an A+ rating had a dispute with a customer. To protect this rating, the company might go the extra mile to resolve the concern. Otherwise, the company risks losing its strong BBB rating, and losing customers who rely on the rating before choosing a company.
These tools, when used properly, can help a consumer make an informed choice, and can give a consumer the power to give an informed complaint if he is wronged by the company.
Because the BBB is a private company, it needs to make money to stay viable. It doesn’t charge the consumers who use its service; instead, the BBB receives money from many of the businesses it rates. Several recent news stories report that that companies have increased their rating dramatically by paying a few hundred dollars to the BBB. In fact, the recently abandoned BBB rankings procedure actually considered whether a company paid dues to the BBB. Thus, a company might receive a lower rating just because it chose not to contribute money to the BBB. Further, those companies which were willing to pay the BBB may have inflated their prices to make up for the expense – thus harming consumers who selected BBB approved companies.
The BBB claims that it no longer gives better rankings to those companies which pay dues. But, because the BBB does not fully disclose how it calculates its ratings, consumers can’t be sure why a company is given its specific rating. And businesses who don’t pay dues to the BBB are not allowed to see or respond to customer complaints lodged with the BBB. Considering this lack of transparency, consumers should not believe that the BBB’s rating system is flawless.
The BBB is the most widely recognized name in business ratings. Still, a consumer shouldn’t use the BBB’s ratings as the final answer in corporate reviews. Instead, consumers should take the benefits of the BBB – searching a business’s history, considering a business’s rating, and (potentially) filing a grievance – and use them in harmony with other tools. Those who do this will become “informed consumers” who can stop problems before they start.
Several other ratings agencies exist, many of which are not funded by direct contributions from businesses. One popular website, Yelp, aggregates reviews submitted by consumers, thus reducing conflicts of interest and increasing transparency. But Yelp makes income from selling ads on its page, so a company can still get some preferential treatment if it pays for advertising on the site. Further, there it is unclear that all reviews are legitimate. Google offers a similar tool to read business reviews, as does Kudzu, Angie’s List, and many more. Some of these systems are subscription based, which means that the user pays to access the content. Though this can be a small disadvantage for consumers, it can preserve the integrity of the ratings systems by preventing businesses from buying a favorable score. Still, each resource has its own pros and cons. Wise consumers will use these resources in concert when seeking business information.