Written by Stephen Beard, Managing Director of Plyo Bookkeeping, a Vancouver-based bookkeeping firm.

Introduction

I own a business, and on the advice of a friend I took the time to register with the Better Business Bureau (BBB). It wasn’t long after I created the free account that a BBB sales agent called me, trying to convince me that I should pay to become an accredited member of the BBB. At the time I didn’t know much about them, so I decided to do some research first.

I found the available information was often confusing and contradictory, and I also found a lot of accusations that the BBB is itself unethical and untrustworthy. This blog is designed to give a comprehensive overview of how the Better Business Bureau works, whether it is worth becoming a member of as a small business, and whether consumers can trust it.

What is the Better Business Bureau

The Better Business Bureau is a US based non-profit organization that’s been around under one name or another for over a hundred years. The BBB is organized into regions, with each region largely operating autonomously with its own staff and board of directors.  

The aim of the BBB is to act as an independent moderator between customer complaints and businesses. Rather than just leaving an angry Google review, you can contact the BBB, and they’ll then contact the business on your behalf. If the business responds to the Better Business Bureau and resolves the complaint, then the BBB will consider that a positive interaction, and will award the business a higher rating (ranked from A+ to F) on their website.  

If that process seems clunky, then it’s important to remember that the BBB was started long before the era of online reviews, so being able to check a business’s BBB rating was one of the few ways to know if it was trustworthy in the pre internet age.

What the BBB is not

Because it’s such a common misunderstanding, I need to address what the BBB is not. The BBB is not a government organisation. It has no legal authority to fine or punish businesses. It is a non-profit organisation with the aim of providing customers with a means of escalating complaints. The only power it wields is the ability to give a business a lower BBB rating.

The fact you can file a complaint with the Better Business Bureau makes it seem like an official organization with genuine authority. There advertising and marketing is also designed to give this somewhat misleading impression.

Is the BBB Trustworthy?

Asking whether the Better Business Bureau is trustworthy might seem like a strange question, after all they’re meant to be the arbitrators of trust. But there are no shortage of allegations that the organization works on a ‘pay to play’ model, and that the ratings on the BBB site mean little.

For example, I signed my business up for a free account with the BBB, and after filing in some very basic information, my business was awarded an ‘A’ grade status (A+ is the highest and F is the lowest). No one has ever complained about my business to the BBB, so it seems that an A grade is the assumed default.

No. of Complaints Not Part of The BBB Rating

If someone did complain about my business to the BBB, then surprisingly that wouldn’t affect my grade. The Better Business Bureau does not take the number of customer complaint into account for its grade. This makes some sense, as a large business could have hundreds of complaints, but this could represent a very small percentage of their total customers. Seeing as customers only go to the BBB to complain, it does make sense that they don’t factor number of complaints into the BBB rating.

How a Complaint is Handled Determines BBB Rating

Instead the BBB scores business on how well they respond to those complaints. When a customer reaches out to the BBB with a complaint, the BBB is meant to get in touch with the offending business, and to try and get them to come to a better resolution for the customer. If the business is helpful and reasonable, then the BBB will award them a positive score. But, if they don’t engage with the process, or the BBB found the business to be unfair and unreasonable, then they will downgrade the businesses BBB rating. This sounds great in principle, but here’s where the controversy stats.

Pay to Play Accusations

Every Better Business Bureau chapter needs to make money to survive, which it gets by convincing local business to pay an annual fee to become accredited. For example, they quoted me around $800 CAD for a year’s membership. The accusation from many customers who have used the BBB complaint service is that if the business being complained about has paid for accreditation, then the BBB is very unlikely to downgrade their rating or take any negative action against them. There are numerous complaints online to this effect.

However, if the business has not stumped up the cash, then the BBB seems willing to downgrade their ranking if they’re non-compliant. But let’s think about this from the perspective of the non-accredited business. Customers are always right, but as every business owner knows, they can also be difficult, rude and sometimes dead wrong. Why should you be penalized for refusing to engage with an arbitrary organization that has no legal authority to enforce a particular customers rights? There are also reports from business owners that the Better Business Bureau uses customer complaints as an opportunity to send you a brochure on the benefits of becoming an accredited member. If those reports are true, then the BBB is sending very mixed messages to the business owners – one that prioritises being a paid member over dealing with a customer complaint.  

From the BBB’s perspective it makes a lot of sense. A small business can be significantly damaged by bad online reviews, so they’re very likely to be able to get an engaged conversation with the business owner when they reach out about an official complaint being made to the BBB – what better time to make a sales pitch?

BBB Chapters Don’t Have The Necessary Budget

If you think about it logically, it would require a huge amount of staff power to adequately and fairly adjudicate on every customer complaint – and that would be very expensive. We live in a modern world where the average person is constantly having interactions with business, many of them not satisfactory. To fairly adjudicate this number of complaints would be incredibly expensive, and again many users of the Better Business Bureau complain that they simply don’t follow up or seriously engage with businesses. To me this is unsurprising, as the BBB has no official power to force businesses to talk to them, so a lot of of their time will be spent fruitlessly chasing down businesses that don’t want to be a part of the BBB process.

The BBB – No Longer Relevant in The Internet Age

The Better Business Bureau seems like an organization that no longer makes sense in the internet age. When it was the only source for reliable business reviews, businesses had to care about their BBB rating, and they likely offered a valuable service to clients. In the internet age, when reviews are quickly and easily available online, the BBB appears to primarily exist to convince local businesses to pay and join, not to be a particularly useful service for customers.

This is problematic because it’s very easy for small businesses to pay for accreditation, and to then advertise themselves as BBB accredited with an ‘A’ rating. As many consumers think the BBB is a government organization, and that it’s rating are actually meaningful, this can be more misleading than helpful to consumers.  

Should I get my business accredited with the Better Business Bureau?

Despite the serious misgivings I have about the BBB from the customers side, that doesn’t mean there aren’t valid reasons to join it. For example, I think it is a problem that many people perceive the Better Business Bureau to be a government organization, with accreditation based on a high standard of background checks. I think it’s a problem because that’s completely incorrect and customers are thus easily mislead. But if many people believe this, then an investment of $800 per year to be accredited can act as very cheap marketing. The BBB logo will add a sense trustworthiness and validity to your business website, something that is generally very hard to buy. For certain businesses, particularly trades, this could be a great investment.

The BBB also advertise a range of other benefits, such as the fact that customers can search for you as an accredited business on their website. The reviews from business owners online suggest that most didn’t feel like they got enough leads to justify the costs. An exception to this might be businesses which cater to an older clientele. Younger generations are unlikely to be looking for services based on their BBB accreditation, but the BBB used to be a much bigger deal before the internet, so older demographics are likely to place a higher value on the BBB brand.

For most businesses I don’t think joining the Better Business Bureau justifies the cost, but for a few industries and niches it may be worthwhile.