Understanding the Role and Impact of the Better Business Bureau
Since its establishment in 1912, the Better Business Bureau (BBB) has become a cornerstone for evaluating a business’s trustworthiness and performance. Whether you’re looking for a new wireless service provider or a local plumber, checking a business’s BBB profile can offer an added level of confidence. The same goes for verifying the legitimacy of charities. But how reliable is the BBB itself? While the bureau has assisted millions of consumers in avoiding disreputable service providers, there are some caveats. Let’s delve deeper into how the BBB operates and its limitations.
Key Takeaways
- The BBB’s mission is to promote “marketplace trust,” achieved by grading companies based on trustworthiness and performance, and mediating consumer complaints.
- Business grades are determined by over a dozen factors, including the company’s track record with consumer complaints.
- Though the BBB presents itself as an independent validator of good business practices, it has faced criticisms regarding potential conflicts of interest due to funding from member businesses.
Unlocking the BBB: Benefits and Melodies
Advancing Marketplace Trust
The BBB is a nonprofit membership organization spanning North America. It champions market trust primarily by rating businesses and resolving consumer complaints. Additionally, the bureau offers consumer education and programs guiding businesses to adopt best practices.
Its revenue comes from corporate memberships, enabling consumers to access a free directory of business profiles via the BBB website. Each profile includes basic details about the company, including its BBB rating, derived from a scale of “A” to “F”, alongside customer reviews and information on consumer complaints.
Accredited versus Nonaccredited Status
Businesses may choose to become “accredited,” which necessitates supporting the BBB’s mission and vision. Although the BBB website provides information on both accredited and nonaccredited businesses, accredited status is prominently displayed and often used for marketing purposes.
Accreditation fees begin at about $500 annually for small businesses, escalating to over $11,000 for companies with 2,000 or more employees. Moreover, businesses are charged for leveraging their accredited status in advertising.
To maintain accreditation, businesses need to uphold a grade of “B” or better, resolve consumer complaints adequately, and demonstrate honest advertising practices.
The Intricacies of BBB Ratings
Consumers often consider Better Business Bureau grades essential when deciding on using services from a specific business. Each rating is determined by awarding or deducting points across 13 key areas, with a possible total of 100 points. Critical factors include unresolved or unanswered complaints, the business type, non-compliance with mediation or arbitration, and any governmental actions against the company.
Understanding Letter Grades
These numerical scores are then converted into letter grades, such as an “A+” for scores ranging from 97 to 100, an “A” for scores between 94 and 96.99, and an “A-” for scores from 90 to 93.99. However, the bureau clarifies that these grades are not guarantees of business reliability or performance and should be considered alongside other available information.
Facilitating Dispute Resolution
Another crucial role of the Better Business Bureau is mediating disputes between consumers and businesses. Consumers can file complaints through the BBB website or by contacting their local BBB chapter. While accredited businesses must respond to maintain their status, nonaccredited businesses respond voluntarily, which can still help enhance their BBB rating.
Journey of a Complaint
After a complaint is filed, the business is expected to respond within 14 days. The BBB notifies consumers about the business’s response or lack thereof. Even if a business responds, the outcome may not always meet the consumer’s satisfaction. In such cases, further responses can be requested, and the BBB might suggest mediation or arbitration for resolution.
Upon closing a complaint, it is marked as either Resolved, Answered, Unresolved, Unanswered, or Unpursuable.
Evident Criticisms
Critics suggest a conflict of interest exists due to the BBB receiving revenue from the businesses it grades. Investigations, such as those by ABC’s 20/20 in 2010 and CNN in 2015, have highlighted instances where paying members received high ratings despite significant regulatory actions against them. While the BBB does focus more on member businesses, potentially overlooking nonmembers, the organization acknowledges that nonmember businesses are less thoroughly vetted regarding licensing and government actions.
Evaluating the Reliability of BBB Ratings
The BBB itself does not guarantee the reliability or performance of a company through its ratings. Instead, it provides a source for consumers to contemplate when selecting businesses. The fateful stack of BBB’s graded profiles can guide trust, but it shouldn’t be solely relied upon. Rather, consumers should also consider other review platforms like Yelp, Google Reviews, and Angie’s List to get a third-party perspective.
The Pressing Bottom Line
In today’s diverse landscape of consumer reviews, no single platform can assure the complete identification of unreliable or poorly performing businesses. Although vital, Better Business Bureau ratings should be one of many tools a consumer engages with to make well-informed decisions, especially for substantial purchases or significant hire decisions.
Related Terms: business reliability, consumer protection, business grading, customer complaints, accrediting agencies.
References
- Better Business Bureau. “About Us”.
- Better Business Bureau. “Mission and Vision”.
- Better Business Bureau. “Overview of BBB Ratings”.
- Better Business Bureau. “Complaints”.
- Center for Ethical Organizational Cultures, Auburn University. “Better Business Bureau: Protecting Consumers and Dealing with Organizational Ethics Challenges”. Page 3.
- Fit Small Business. “How to Become a BBB Accredited Business in 3 Steps”.
- Better Business Bureau. “Accreditation Standards”.
- Better Business Bureau. “Frequently Asked Questions about the Better Business Bureau”.
- Fleming, Troy. “Pay for Play Scandal at the Better Business Bureau”. Loyola Consumer Law Review, vol. 23, no. 3, 2011, pp. 445-458.
- ABC News. “Terror Group Gets ‘A’ Rating From Better Business Bureau?”
- CNN Money. “How the Better Business Bureau Rakes in Millions”.
- Better Business Bureau. “Overview of Ratings”.
- People Clerk. “Is it worth filing a complaint with the BBB”?
- Better Business Bureau. “Frequently Asked Questions About the Better Business Bureau”.
