Tuesday, June 10, 2014

It's Time For A Timeshare Restocking Fee

Six things we know for sure:
1)  Consumers simply don’t understand the mountains of timeshare paperwork generated with a sale

2)  Frustrated timeshare owners are being taken advantage of by an army of scammers that ultimately do great damage to consumers and resorts alike

3)  Less than scrupulous sellers have been known to “sneak in” paperwork into the aforementioned mountains of paperwork

4)  The one thing that all of the “good guys” can agree on is that the “bad guys” need to be brought to light and thrown out

5)  Consumers sometime need a way out

6)  Timeshare simply has to adopt policies that other industries have been using successfully for years

It’s with this in mind that I unveil my solution:


Just as you can return a computer for a refund less a restocking fee if the computer is not what you wanted, you find out you wanted a Mac when you purchased a PC, you come to the conclusion you are a technophobe or you thought that the Internet “came with the computer”, you should be able to return a timeshare for a full refund less a restocking fee if:

·        You thought you could move into your timeshare full time

·        You have no idea how exchanging works

·        You lose your job six months after purchase

·        You didn’t quite remember the bit about the annual maintenance fee

·        Your attorney does a thorough review of the paperwork and discovers that the “upgrade” you thought you purchased isn’t “quite” what you thought it was

This restocking fee should be a sliding scale fee.  I propose 5% of purchase price for purchases up to $7,500, 7% for purchases of $7,501-$20,000 and 10% for purchases over $20,000.

Furthermore, there is a time limit of 6 months or until the first maintenance fee is due, whichever is less for consumers to take advantage of this return policy.

Who benefits from this?  EVERYONE.

Consumers benefit from having time to fully review the paperwork and fully understand the benefits and responsibilities of timeshare ownership, which you and I both know cannot (and should not be attempted) be accomplished in the space of a 120 minute sales pitch and a 20 minute closing

Resorts, developers and resellers (the good ones at least, who have nothing to hide) benefit from having the good PR benefit of doing the right thing for consumers.

The industry as a whole benefits from having a much better understanding of who the bad guys really are.

Furthermore, everyone benefits by only having people who are confident in their purchase move forward with it, leading to happy owners, higher owner satisfaction, an increase in owner referrals and far less likelihood of non-payment issues down the road.

This “re-stocking fee” should be implemented for both primary and secondary market sales as it is obvious that there is too much room for “misunderstanding” in a timeshare sale.

This additional time to truly understand all the implications of a major purchase such as a timeshare should be in addition to the legal rescission period in each jurisdiction.  Ten plus years in and around the timeshare industry has taught me that it would be a foolish endeavor to try and get the legal rescission periods extended.

Having said that I feel that any company, especially timeshare companies need to go the extra mile and take the moral high ground in addition to adhering to the legal rules and regulations. 

Legally, Nordstroms does not have to accept returns without a receipt.  They do and they consistently receive exemplary customer service scores.  Legally, Apple did not have to provide me with any assistance when I encountered a “glitch” in my most recent software update since my iPhone was long out of warranty.  They did and my opinion of the company stays at an extremely high level.

I think this “restocking fee” will ultimately result in more sales with less rescission.  Customers buy more when there’s less pressure.  Buying a $20,000 timeshare in the middle of a 7 day vacation when you only have a 10 day cooling off period is pressure.  No one reads the paperwork or even fully understands what they purchased in many cases.  This leads to fear…fear leads to rescission.

The “extra time” that the customer has also means that the resort and the exchange company have that extra time to really communicate and educate the customer.  More time, more communication and more education leads to more confident owners.  Owners who are less likely to cancel.


  1. Lisa,

    That's the wrong problem and the wrong solution. What you have suggested is a weak workaround. One that doesn't solve the underlying problem:

    That timeshares are worthless.

    If you buy something it should have value, it's weird that anyone would suggest that you should have to pay to get rid of something you bought! What you propose is essentially that.

    The timeshare is sold to you in a high pressure, emotional sales session. "You'd go nuts if you can't go on vacation, so buy this" As if the only way to get to go on vacation is by buying a timeshare!

    If a timeshare owner could just walk away at any time, and could not be turned over to collections, credit bureaued or otherwise harmed by the timeshare company, timeshare owners would become valuable to those companies. They would have to keep their owners happy and paying their maintenance or they would be out of business. As it is now, there is one timeshare company and 10s of thousands of owners, who are essentially cash cows for the timeshare company. They are "noise" at best.

    That you should have to pay a "restocking fee" to return what you bought from them for free is ridiculous. The rule should more be your timeshare should be saleable to anyone at any time and the timeshare company cannot interfere with that except by buying it back themselves.

    I'm sure your "restocking fee" idea sounds great to at least some of those timeshare companies, but I completely reject the idea that they should get the timeshare they sold you back for free! That just perpetuates the worthlessness of the timeshare proposition.

    Find a way to add value, make timeshares valuable, and the business will prosper. Timeshare owners will see value. As long as timeshare companies consider timeshare owners "noise" and can be held to pay their maintenance forever timeshare will have no value.

    1. You make some valid points,

      I don't think I have all the answers.

      I think the underlying issue is the value proposition. If that is correctly addressed, everyone would be much better off.

  2. The other rule change that would revolutionize the timeshare industry is if you call a week ahead and want to come to the resort, they should have to accommodate you.

    As it is, the timeshare companies rent the hell out of everyone's weeks so you can't even get what you supposedly "own" unless you plan a year in advance.

    If they couldn't do that, timeshare would have real value.

    You would find you could rent what you own out to others yourself, rather than have them just take your property away, rent it out to others and keep the money themselves.

    Remember that RCI weeks thing a couple years ago, where they had already rented out your week so you couldn't get it? That should be stopped by the government. If they rent "your" week they should have to pay YOU.

    1. Interesting point, Although a one week reservation window might need to be extended in order to be realistic for everyone.

      I think there is a "sweet spot" somewhere in-between 1 week and 13 months.

  3. It's a matter of what you own, or not. If your ownership rights were much stronger and you had concrete rights as to the property, you would find things were much better.

    I think the timeshare industry takes terrible advantage of their customers.

    If that were limited things would get better for everyone, even the developers.

  4. The problem is that they can sell you a timeshare, and then take it away, in numerous ways.

    They can make it too expensive by charging you maintenance the may well exceed the cost of renting the same week, from them! It would be pointless paying $750 in maintenance year after year and having to struggle to reserve your week when if you just called them up to rent next week they might be more than happy to rent to you for $450. That just goes on all the time. The surprising part is it's apparently not illegal.

    They can take it away by making you reserve *your week* in advance, maybe so far in advance you can't plan properly.

    If you had any rights at all, if they couldn't do those things to you, well, you'd feel better about the timeshare you bought, and you'd never consider giving your timeshare away, or back to them

    So that's what's going on here, and that's the problem that needs to be solved.

    Adding value to the timeshare you paid for so that you don't want to pay a fine, or restocking fee to be rid of it.

    That is in everyone's best interest. Don't you think?

  5. The issue is that the entire system was set up in a way that gives a lot of rights to the developer or the exchange company. The paperwork is so convoluted and there's so much of it, that I doubt more than a handful of owners have ever read the entire contents of a POS for instance.

    It's time for a reboot in my opinion. This "restocking fee" I've suggested is merely one option.

  6. You have got to be kidding! 6 months is nothing when you can use the property until the next year. Then you discover the lies. What, it cost $169 to stay at my home resort because there is no availability during my assigned week. And the said I could bring my dog and my own jet ski to use on their private lake. And they said I could smoke my brains out while lounging in bed watching my favorite show on a NOT flat screen TV. And only one roll of toilet paper for a week. Lies from the sales people are not discovered in 6 months, especially when the maintenance fees aren't due for a year. Change you thinking to the lied to fool that bought one of these useless pieces of paradise (nightmare).

  7. If a resort or an exchange company takes that long to process the transaction, that is just plain wrong

    As to your jet-ski, dog and smoking comments...I can only hope you are being jokey.

    Prospective purchasers need to read the paperwork, or at least have someone review it that knows what to look out for. If there is something that is important to anyone, such as the ability to bring dogs, then they should get it in writing.

    Unfortunately, as we all know what is said bears little relation to what is the truth.