Friday, 20 January 2017

The Voice - Consumer's Voice

What is a pyramid scheme?

Can you kindly explain to me what is a Pyramid Scheme? Is Amway a pyramid? And also what is Network Marketing and or Direct Sales?

It’s an excellent question and it’s a very good time to discuss it. Maybe if more people understood, fewer would fall victim to the scams that are out there.

Let’s start with Amway. Amway is a Multi-Level Marketing scheme. They have a range of household products on offer but you can’t buy them from your local supermarket. Instead you buy them from people Amway have recruited, people operating small Amway businesses from their own homes. So far so good. If that’s how you want to buy things then good for you. It’s not a cheap or effective way to buy things but that’s your choice. The problem is that the Amway distributors are encouraged (some would say forced) to recruit distributors beneath them, having been promised a share of the business they bring in. If one distributor recruits five people and they each recruit another five you now have thirty-one people. If that continues another level you have 156 people in what look just like a pyramid. Add another few generations and you soon would have every adult in Botswana in your group earning money for you. You can see how this can’t work, can’t you? There simply aren’t enough people to be recruited. Amway’s own figures show that in the USA and UK their distributors are lucky if they make just a few hundred Pula per month and that’s before they pay all their business expenses. Most make nothing or even lose money. The same goes for all the other MLM, Network Marketing or Direct Sales companies. They’re all the same. Very few people make any money, no matter how hard they work. The only ones that make any money are the people who created the scheme, the ones at the top of the pyramid.

Then there are pyramid schemes. A pyramid scheme is the same as a Multi-Level Marketing scheme but without any actual products. It’s all about recruiting a pyramid of people who pay to join and whose money flows up the pyramid towards the top. World Ventures is a pyramid scheme, as is Bitclub Network and Helping Hands International. The focus with a pyramid scheme is all about recruitment, not about products. If someone tells you that you don’t have to buy or sell things to make money, rest assured they’re trying to scam you. Just show them the door.

Can I get a refund?

I recently sent my worker to buy me a charger at for P500. However when I arrived at the office I immediately contacted the store to tell them that I wanted to return the charger as it had no pin and was also expensive.

They told me that they could not refund me as they had already deposited the money. The following day I took the charger to their shop and they informed me that they don’t refund customers. I then left the charger at their shop.

I plead with you to assist me in this matter.

Thanks for sending me a complicated one!

Firstly, we need to establish why you want to return the item. Was it because it was missing something and it doesn’t work? If that’s the case then they’ve sold you something that isn’t “of merchantable quality” as required by Section 13 (1) (a) of the Consumer Protection Regulations and you have a right to one of the three Rs: a refund, repair or replacement. However, it’s important to understand that the store can decide which of those three Rs they choose. If there was a part missing they can simply give you that part. If the charger was working they can fix it.

However, if you want to return it just because it’s too expensive then I’m sorry, you’re out of luck. Despite what many people think, you don’t have a legal right to change your mind. In that case you need to ask yourself what the store did wrong. Did they lie to you? Did they deceive you in any way? Did they actually do anything wrong? They sold you something at a price that was openly displayed and you, a competent adult (or your worker on your behalf) consented to that deal.

Let me know which it was and I’ll happily get in touch with the store and see if they can be a bit more helpful. Either way their excuses about having deposited the money and “don’t refund customers” aren’t really good enough, are they?

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