On May 23, Bass Pro Shops announced that Bluegreen Vacation Resorts would no longer be allowed to sell timeshares via their kiosks in Bass Pro Shops citing their use of high-pressure sales tactics as the reason they were terminating their relationship with the infamous timeshare company. According to a lawsuit filed in April, Bass Pro entered into an agreement with Bluegreen Vacations in December 2007 that allowed the,\ Florida-based timeshare company to set up kiosks in some Bass Pro stores in exchange for Bluegreen Vacations paying a commission on the resulting sales. Bass Pro Shops was a part owner (49%) in the Bass Pro Big Cedar Vacations in Table Rock Lake in Branson, MO while Bluegreen owned 51%.
Bass Pro accused Bluegreen Vacations of failing to pay commission on some sales and doing chargebacks, or taking back, commission money from Bass Pro when a customer defaulted or canceled years after the initial purchase.
According to Bluegreen :
“We previously informed Bass Pro that the aggregate amount of such adjustments for defaults charged back to Bass Pro between January 2008 and June 2017 totaled approximately $4.8 million. We believe these chargebacks were appropriate and consistent with the terms and intent of the agreements with Bass Pro, and we are continuing to discuss the matter with Bass Pro. On October 20, 2017, to demonstrate our good faith, we paid this amount to Bass Pro pending a resolution of the matter in the ordinary course. We recognized the $4.8 million payment as a general and administrative expense during the fourth quarter of 2017. In addition, the resolution of the matter may adversely impact our future marketing expenses.”
The lawsuit further claims Bluegreen Vacations violated a term of its contract that prohibited “high-pressure salesmanship,” which Bass Pro feared would negatively impact the customer experience at its stores.
Bass Pro Shops is currently seeking 10 million dollars in damage, alleging that Bluegreen refused to pay them for commissions. Bluegreen countered with a $300 million lawsuit if Bass Pro terminated the agreement.
Bass Pro Shops released the following statement:
“Bass Pro does not tolerate high-pressure or offensive salesmanship in its stores,” the company said in a statement. “One of our partners, Bluegreen Vacations Unlimited, has not lived up to its contractual obligations on this important point. Due to this issue and other defaults, Bass Pro has terminated its marketing relationship with Bluegreen in accordance with the parties’ contract.”
Bluegreen denied the allegations, saying “Bluegreen intends to pursue all legal and equitable remedies available to it, including the filing of a counterclaim in the pending litigation, for wrongful termination by Bass Pro of the parties’ marketing agreement.”
Currently, Bass Pro & Bluegreen stated they would have no further comments because this matter is pending litigation.
After the split, Bluegreen Vacations (NYSE:BXG) slipped 13% and BBX Capital (NYSE:BBX), which owns 90% of BXG, fell 4.2%.
Positive customer experiences are paramount to Bass Pro’s mission. Bass Pro does not tolerate high-pressure or offensive salesmanship in its stores.
“One of our partners, Bluegreen Vacations Unlimited, Inc. (“Bluegreen”), has not lived up to its contractual obligations on this important point.”
A user on the forum on Tug2.net discussing the situation made the following comment:
“Ok, it’s hard to bite my tongue on this one. Is Bass Pro really surprised that Bluegreen engages in ‘high-pressure salesmanship’? Or is the truth more like: Bass Pro is willing to ignore ‘high-pressure salesmanship’ so long as the commissions are acceptable?”
But Bass Pro is valued at $6.4 billion and employess 45,000 workers. No to mention the generous no-questions-asked, lifetime guarantee on all their products and maintains a positive public perception.
While Bluegreen assets are valued around $1.1 billion with 4500 workers and it has been in a series of lawsuits in the last few years, and public perception of timeshare sales and usage is under intense scrutiny due to sales techniques and exorbitant annual fees.
Bluegreen blames their chargebacks on the burgeoning timeshare exit industry.
“We believe these exit firms have encouraged such owners to become delinquent and ultimately default on their obligations and that such actions and our inability to contact the owners are a primary contributor to the increase in our annual default rates. Our average annual default rates have increased from 6.9% in 2015 to 8.4% in 2018. We also estimate that approximately 14.4% of the total delinquencies on our VOI notes receivable as of December 31, 2018 related to Vacation Ownership Interval notes receivable subject to this issue.”
It appears the retail timeshare industry is just too troublesome for Bass Pro Shops and their move to sever ties with Bluegreen seems like a legitimate move to ensure their customers aren’t exposed to predatory timeshare sales and engaging with the timeshare exit industry. An industry notorious for preying on buyers remorse and the lack of viable exit options for consumers who want out of their timeshare contract.