Renting Points We Are Selling Too Low

[RobDoc]

...But I quickly realized, when I was trying to rent a large number of points for a GV family vacation and received a few offers in the range of $12-15 per point, that I could buy the points outright for 42 years (with banking and borrowing points) for just about twice what the member would be collecting from me for one week...

You may want to explain that calculation, since it appears that you feel that you can purchase points for $24-30 per point and that's not a likely scenario. In addition, your math doesn't appear to take into consideration any maintenance fees at all- which make up a significant percentage of the member's costs for the points used to make the reservation. Even with banking and borrowing (which would limit the ability make reservations each year), the costs involved would be far more than double any rental in the $12-15 range. Those costs are still far below the regular charges for most nights in DVC resorts.

...and I'm saying, "Why should I subsidize a huge portion of a member purchase price for one weeks vacation? Not worth it, if I wanted to spend that much I would buy in.

I have no problem with any rental rate (above or below $10), but wanted to correct the impression that anyone could purchase DVC points for twice the rental costs quoted above. I can't think of ever seeing a rental , here or anyplace else, that would "subsidize a huge portion of a member purchase price for one weeks vacation." It would take a lot more than $12-15 per point - probably more like $45-50 per point - to begin to approach expensing ownership with a one week rental.

 

[snowbunny]

You may want to explain that calculation, since it appears that you feel that you can purchase points for $24-30 per point and that's not a likely scenario.

Glad to.

I needed 429 points for the family reunion at a GV at BWV. At $15 per point, that's $6435.

I ended up purchasing 150 points at $92/point from Disney ($13,800). That's a little ($930) more than twice $6435. By banking 150 points from my first use year, and borrowing 129 points from my third use year, I have enough points to do the reunion in the middle year, and another 40 years to go on my contract.

At no time did what I 'feel' come into it. It was a simple math calcuation that I would be better off purchasing a contract, even at current rates, than paying $6435 to a member for less than one week.

 

[RobDoc]

I'm glad you're happy with your purchase. Don't forget to add in the cost of the annual fees whenever doing any calculations.

You can do the same "calculation" using $10 per point and the difference is only a little ( $1115) less than the difference using $15 per point.

The point I was trying to make is that even at $15 per point, the rental rate for most DVC stays will be much better than Disney's rack rate. There is only a little difference, per your figures, when using $10 or $15.

Your post does a wonderful job of illustrating the value of DVC ownership when compared to Disney's rates or even rental rates (whether at $10 or $15 per point). The same principles apply to all Disney reservations - those funds could have been used to purchase DVC.

 

[Meliechick]

I have seen several references regarding the issue being members renting to non-members and non-members not understanding the value of points. I had an experience that was completely opposite.

DH and I did an add-on and received 100 extra pts. We decided to check out the rental mkt. We didn't need the extra money and we had a lot of pts (not distressed) so we thought it was a good time to "test" the ease of renting out pts, in case we are ever in a bind and need to rent. The reception that I received from non-members was very positive and they did not try to haggle on price at all. I had one response from a member that acted like he was doing me a favor to take the pts off my hands for $8 pp. I know that I haven't posted much but I do read a lot. I check these boards almost daily. I know the value of my pts.

 

[yitbos96bb]

Wow!!! You feel pretty strongly about this!! Just a "heads up"...price fixing is illegal, so be careful.

But, yes....points are (IMHO) way to low!!!



Beca

I have seen other people post this, but is it really true? This is a secondary market sales atmosphere and most price fixing is for specific regulated industries. If you for a fact it is illegal, please link to a source... I would honestly be fascinated to find out the legality of price fixing on an unregulated secondary market.

 

[RobDoc]

I have seen other people post this, but is it really true? This is a secondary market sales atmosphere and most price fixing is for specific regulated industries. If you for a fact it is illegal, please link to a source... I would honestly be fascinated to find out the legality of price fixing on an unregulated secondary market.

http://business-law.freeadvice.com/trade_regulation/price_fixing.htm

Basically, if two or more agree to set a price (either high or low) for a product or service, it could be considered price fixing and that is covered by a number of state and federal laws.

 

[snowbunny]

The point I was trying to make is that even at $15 per point, the rental rate for most DVC stays will be much better than Disney's rack rate. There is only a little difference, per your figures, when using $10 or $15.

Yes absolutely...although most people who hang around these boards or learn about renting DVC points via Mousesavers, or wherever, know their way around enough not to pay rack rate most of the time. The one thing that I think members tend to forget, though, is that there is a value (that I can't quantify) to having a reservation with CRO that is under control of the purchaser, refundable, etc., versus sending someone you don't know thousands of dollars via Paypal and, even with a 'contract,' hoping for the best.

Your post does a wonderful job of illustrating the value of DVC ownership when compared to Disney's rates or even rental rates (whether at $10 or $15 per point). The same principles apply to all Disney reservations - those funds could have been used to purchase DVC.

Agreed!

 

[yitbos96bb]

What is price fixing?
Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. The general rule provides that a vendor may not in combination with another vendor agree to set a certain price thereby creating a fixed price within a certain market. A business acting on its own and not in concert with another may use legitimate efforts to obtain the best price they can, including their ability to raise prices to the detriment of the general public. Also, conformity of prices within a given product is not illegal unless such conformity was created by a combination of vendors agreeing on a set price. For example, where competitors agree to sell their goods or services at a specified price, minimum price or maximum price and they receive profits from such an agreement, they are in violation of price fixing. Additionally, setting a price to be charged only within a certain area in order to get rid of competition or to create a monopoly is generally illegal under most state laws. A majority of states have also enacted a "Below-Sales-Cost" law wherein businesses may not sell goods below cost if they do so with anti-competitive intent or effect.

This information is only a brief summary of the extensive price fixing laws and regulations. For specific application of price fixing regulations, please consult with an attorney.

The other thing to ask yourself is if this applies in this situation. The above laws are for businesses, which are licensed to operate in a state. Even an individual as you mention, usually needs a Vendor's license in order to operate in their state. None of us are actually licensed to sell our points And I will bet that most of the people who rent do not put the income down on their taxes; since it would be considered taxable income this might be illegal. My point is that the rules that apply for businesses in this case are not necessarily applicable to us. The fact some are selling their goods and not reporting the small amount of income is probably illegal, and it might be illegal in some states to sell the points as well without a vendor license. The point is that we really don't know what would be legal or illegal with selling points. I would love for a DA or State's attorney to comment if there is one on the board.

 

[yitbos96bb]

http://business-law.freeadvice.com/trade_regulation/price_fixing.htm

Basically, if two or more agree to set a price (either high or low) for a product or service, it could be considered price fixing and that is covered by a number of state and federal laws.

Right, I have seen this before... still not sure if it is applicable. We aren't Vendors. We do not have vendors or resale licenses. I'm just saying if someone is going to crack down legally on pricefixing here, there are probably a lot of other things that would be violated by anyone renting their points. If things like a business and vendor's license aren't applicable, then would price fixing laws be?

 

[StephenKay]

My biggest wonder is why does a non-member think they are entitled to a deluxe vacation at less than value prices???? I see so many posts about, "I can get two rooms at the value resorts for less than I would pay for a 2 bedroom villa at $10 or $10+ per point". Why should a member subsidize a non-member?

We take lots of family members or friends and provide the lodging for free. I'd rather have a very grateful friend or family member along on a trip than a bargain hunter.

The price of renting in 1999, $10 per point
The price of renting in 2000, $10 per point

The price of renting in 2006, $10 per point or even less

Now somewhere having seen the hotel prices go up and up, they, the renter scammers, are trying to become "renter" members, with all of the choice, none of the dues and only think they own DVC.

Pray to the renter we are not worthy of your money.




PS: This is tongue in cheek and for the person who thinks they can get a moderate for $108 they will have a long wait, even with AP discount it is still $122

 

[salmoneous]

I don't know about the OP of this thread, but I've noticed that in other threads the folks pushing the hardest for people to not rest for $10 are people who *don't* rent points. Kinda funny.

 

[Johnnie Fedora]

The price of renting in 1999, $10 per point
The price of renting in 2000, $10 per point
The price of renting in 2006, $10 per point or even less

Now somewhere having seen the hotel prices go up and up, they, the renter scammers, are trying to become "renter" members, with all of the choice, none of the dues and only think they own DVC.

Sounds like there's been price fixing in the rental market for about 6 years now.

 

[No1HawkFan]

These threads AMAZE me LOL!

If you want $15 then ASK for it.. I somehow doubt the FTC is going to come after DIS Board poster for price fixing no matter what you do.

No one is making anyone rent for $10 a point. If you think the price is too low others have posted they get more on EBAY etc. Head there..... (Or of course you could just do what I do either use them or give them to friends)

These threads amaze me sometimes. However, amazingly I have stated that all members have agreed to rent there points for $15 per point (we all had a meeting this Holiday morning). I set it up with Member Services that they will no longer be accepting any reservations where the member has not obtained $15 per point. They will require you to get something notarized indicating you obtained $15 per point and overnight to them before confirming reservation.

Thanks again.

 

[manning]

Isn't the free market great!!

 

[RobDoc]

Right, I have seen this before... still not sure if it is applicable. We aren't Vendors. We do not have vendors or resale licenses. I'm just saying if someone is going to crack down legally on pricefixing here, there are probably a lot of other things that would be violated by anyone renting their points. If things like a business and vendor's license aren't applicable, then would price fixing laws be?

If you read the first line of that explanation - Most state statutes provide that fixing the price of a product or service in agreement with another individual or business is illegal. - it includes individuals along with businesses.

A vendor is not limited to someone licensed to provide a service or product. Anyone offering that product or service can still be held to the same standards if they try to act "like" the business whether they are licensed or not - especially when it comes to setting a price for a product or service. The license is not what determines the intent of the action - those participating in typical "business" activities may be treated the same as those legally licensed and, in fact, may also face other legal issues if they are trying to provide certain goods and services without proper license.

Individuals acting in collusion with other individuals are not exempt from anti-trust laws- licensed or not.

Individuals acting independently and setting their pricing without agreement of others are not violating anything (free market).

(I was a member of an organization deemed by the FTC to be violation of anti-trust laws. The case made it all the way to the US Supreme Court and neither side won except that a cease/desist order was enforced by the court. This issue has similar aspects to what was argued in that case.)

 

[Laurajean1014]

Glad to.

I needed 429 points for the family reunion at a GV at BWV. At $15 per point, that's $6435.

I ended up purchasing 150 points at $92/point from Disney ($13,800). That's a little ($930) more than twice $6435. By banking 150 points from my first use year, and borrowing 129 points from my third use year, I have enough points to do the reunion in the middle year, and another 40 years to go on my contract.

At no time did what I 'feel' come into it. It was a simple math calcuation that I would be better off purchasing a contract, even at current rates, than paying $6435 to a member for less than one week.

You did not calculate your monthly/annual maintenance fees. That will change your numbers.

 

[childsplay]

I've watched these debates come and go over the years and always felt that there would be two driving factors behind any rental price increase. One, the price of comparable onsite accomodations and two, the increase in purchase price and dues. I can now safely say that I was completely wrong. Neither one of those has seemed to have an appreciable influence, it seems to me that as long as supply continues to outstrip demand (by a considerable margin in my estimation) the price will remain stagnat.

I'm guessing that $10 a point will be the norm for at least another 3-5 years, possibly longer. As more and more people find their way to the Dis and discover that they don't have to let their points expire I really believe that the glut of extra points will continue, I know more people will also find their way here to rent, but I just don't see as many takers as sellers. Toss into the mix the ever increasing number of members who have been in DVC for over a decade and don't see $10 a point as bad at all, and it adds up to low prices in my opinion.

I also think that there are many, including myself, that don't use the time value of money factor when calculating rental prices...meaning the money I spent in 1999 for my DVC is long since gone and doesn't factor into my thinking...and if and when I need to rent out points I'll let'em go to the first person who allows me to transfer all of them at once into their account for $8 or $9 bucks, rather than piddle and diddle with "Can you see if they have this..., NO wait check this instead..." kind of thing.

 

[nestlejean]

Childsplay, you have said something true with that "piddle paddle"stuff. It can take time and be a pain to use up all of the points. Snowbunny, you also forget to factor in that the money I and other DVC members spent for our membership that is not being used elsewhere in our lives. Maybe we have loans now for college or house mortgages and are paying interest on them or could have invested that money in a mutual fund (or something that actually "made" money!). Instead that money is in DVC and not actually earning us money but kind of "costing" us money in lost interest or interest we are paying for that money we could be using elsewhere. Someone already mentioned the annual dues too. We bought not to make money but for the vacation accomodations we get and various other reasons (eavh have their own).
I look at renting as using my points to get some of the money I am spending back. I cannot use the points that year and instead of letting them go to waste, I am able to recoup the annual dues and a small portion toward the oher actual costs I have spent. Before I found this board, I let points be wasted. I didn't know anyone to transfer to or rent them to and we had taken our trips for the year. They were banked points and couldn't be banked again so they were "lost". I also had holding points lost because I didn't know what to do with them. Thank God for this board!!!! I feel it is nice to be able to offer the points to others to use and I am able to get back my costs for the year and not waste points and ultimately the money spent on them.

 

[Deb & Bill]

I don't know about the OP of this thread, but I've noticed that in other threads the folks pushing the hardest for people to not rest for $10 are people who *don't* rent points. Kinda funny.

What's even funnier to me is the number of non-members telling members how to use their points.

 

[simpilotswife]

That said, I agree that $10 a point is too low. I really feel that I am barely breaking even, if that, when I rent out points at that cost.

Are you kidding? What planet did you buy your extremely overpriced points from cause I'd like to sell some there!!

This is probably one of the ludicrous statements that I have ever seen

Please oh please tell me how you could possibly make that claim cause this I gotta see.