What insentive is there to give money to schemes like Farepack?

Question

I don't know much about it, but as I understand it, you pay a weekly/monthly amount to someone who knocks on your door and at xmas they will give you some crappy hamper (for which Farepack probably paid less than you paid into the scheme) or vouchers for goods that Farepack will probably earn a commission on. Why didn't these people just put their money into a savings account, or even a shoebox under their bed??

Yeah, I know, I spelt incentive wrongly.

Answer 1

From what I understand, once your money is with a xmas savings club, you can't get it out until xmas - therefore for people with limited resources, there is no temptation to cash it in early if you get into trouble earlier in the year.

Which is still a poor reason to give money to these firms, they're a rip off.

Answer 2

Well, there are people who buy hampers, but quite a lot buy vouchers like Marks and Spencer, Debenhams, High Street Vouchers and so on. You get back exactly what you paid in, and the incentive is that you have made a committment to pay whatever amount you have chosen every month so if you're not good at budgeting, basically someone else is doing it for you. If you put the money into an account you can get at, the temptation is always there to take it out - likewise the shoebox idea. Yes, you could buy vouchers every month yourself, but what's to stop you cheering yourself up with a spending spree mid year? These schemes benefit people for whom spreading the cost throughout the year is essential, and that's why it's so sad that they're the ones who have been hit as chances are they haven't put aside any other money. The tone of your question is very judgmental - whether or not you agree with their methods, surely you feel sorry for all the people who are going to enjoy Christmas a lot less this year through no fault of their own?

Answer 3

None, The only person you can trust with your money is yourself, you are better putting the equivalent amount each week/month into a savings account by Direct Debit or Standing order (so you don't have to do the legwork) and you won't miss it that was either.
At least that way you'll feel good about saving, knowing the money is safe and enjoying purchasing all the goodies (with a friend) just before the event. Hope this helps - I do feel so sorry for all of those who have lost out, I know one.

Answer 4

"Occasionally the stage curtain is twitched back to expose the way things are. The £40m Farepak collapse has just shone a spotlight into a dark corner behind the bright scenery of affluence and wealth..."

"Farepak savers are frightened of banks - and rightly so. One penny overdrawn on accounts for the poor costs a £30 penalty, so defaulters pay for the free banking of the well-heeled."



The rest of the article can be found here.

Answer 5

It can't be to stop them from spending it coz u could do the same with term savings or regular savings 4 a yr + get >5% on both.
Maybe branding? people pay hugely over the odds 4 branded products in other areas even when there clearly inferior e.g. 0.1% bank accs & 30% store cards.

Answer 6

Theres none at all but some people get duped in to thinking there is by unscrupulous sales people who make a commision from the people they get in to the scheme.

Or.. its a pyramid scheme which relies on unscrupulous sales people who make a commission from the people they get in to the scheme.

Either way the people who just "buy" the hamper are getting jipped.

Answer 7

My nearest Morrisons is better value for money than Farepak and I get to choose my food and drink - so no waste!!!!!! I couldn't afford to save weekly anyway - too many unexpected expenses this year.

Answer 8

I know, I heard that one woman had over £4k with them!
How many fcuking hampers did she want?
Can you imagine spending £4k on that tat.

Answer 9

NOW........... non....... lol.......