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I can’t completely fault companies like Amway, Mary Kay, and Lia Sophia. They know that friendship results in two important qualities: trust and guilt. These two qualities are important to companies because they make the process of selling products much easier. I find it relatively easy to politely decline — and hang up on if necessary — a salesperson who calls me uninvited in order to get me to upgrade my phone service or subscribe to a theater. Although I usually don’t have a problem, it can be more difficult to say no to a friend.

In most cases, people join these multi-level marketing (MLM) programs not because they believe in the product but because there is a system designed to allow them to earn significant amounts of money if they play the game right. If you are an influencer in your social circle, you will be able to convince your friends to sell products and host their own parties increasing your income. “Party” is just a code word for “sales pitch.” You can’t achieve success as a multi-level marketer without burning some relationships.

MLM isn’t the only issue. Everyone knows someone who is a social seller. From my observations, the products involved are almost always low quality, too expensive, or both. For example, someone in my office was trying to sell Girl Scout cookies to co-workers the other day for $4 a box. When asked, she had to explain that $4 was the real price and she was not artificially marking the price up. That’s a difficult sell when another co-worker was offering boxes of Girl Scout cookies for $3.50 a piece a few months ago.

I like these cookies, so I usually buy a box each year. Although I’m driven partly by my enjoyment, I’m also driven by guilt. One box of Girl Scout cookies is as far as I’ll go, however.

Dealing with co-workers trying to sell you products you don’t want is easier that dealing with friends who try the same tactics. When a friend is the seller, pressuring you to come to a party (a code word for sales pitch), you have to be strong.

First, you can consider going to the party. Don’t bring any money and don’t bring your credit cards. If you see something you truly like and is a good deal, it will be available from your friend later.
Politely decline. If you buy from your friend and there is a problem with the product, your friendship could be ruined. If the seller is a co-worker, you could be making your work environment uncomfortable. There are many stories about friends disappearing or not answering calls once they take their money, and the sale could go bad no matter how close you are with your friend.
If sales pressure continues, make it clear you are not interested. Sometimes you have to say more than, “No.” Just explain that you’re not interested in the products and you’d prefer to keep the relationship away from business.

Unfortunately, just by denying a friend, you might lose your connection. That may be the fear that prevents people from saying no more often. Saying no is fine, because a good friend won’t use you for their own financial benefit, and a good friend won’t pressure you into something in which you’re not interested.

How do you deal with friends who want to sell you products?

Photo: Pictures from Heather

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Here are a few articles worthy of review.

Lazy Man and Money wonders whether you should have an emergency charity fund. He plans on splitting his charitable giving in three parts: 50% to the American Cancer Society and split the rest between Kiva and any natural disaster that happens to strike.

Generation X Finance suggests protecting one’s self from catastrophic loss with an umbrella insurance policy. Insurance, in general, has been a topic I’ve mainly overlooked both on Consumerism Commentary and in my own life. I’m making an endeavor to look at my insurance situation more closely over the coming weeks.

I linked to this article in last week’s Carnival of Personal Finance, but I believe it’s worth an extra mention. A co-worker in my office has been soliciting many of us to buy jewelery from her as part of a direct sales operation where she earns either free jewelery for herself, cash, or a combination of the two. I always want to help out people I like, but I don’t want to be a part of these operations. The sales techniques pray on guilt and kindness of friends. Money Smart Life doesn’t agree or disagree in particular, but asks readers to weigh in with their opinions.

MyMoneyBlog points out a rule for the economics of shared living. Essentially, your cost of living is a factor of the number of individuals (adults?) in the household. Determine your cost of living factor by taking the square root of the number of adults sharing the house. If you live by yourself, the factor is the square root of 1 (or 1). With one roommate, your factor is the square root of 2 (or 1.414). This means your total household expenses increase by 41.4% when you take on a roommate, but that expense to you, if shared equally between the two roommates, is 70.7% of your original cost. The source of this idea is a recent article by Scott Burns.

My Federal Tax has a quick and dirty explanation of the Alternative Minimum Tax, as it currently stands.

Are you single, looking for love, and financially savvy? Madame X at My Open Wallet is playing matchmaker. Look for a new featured single each month — it could be you.

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