Definition: The Better Business Bureau (often abbreviated to BBB) is a non-profit organization that seeks to improve trust between consumers and businesses by encouraging businesses to adhere to good codes of conduct. It is comprised of over 100 independent local organizations that report to a governing council and offers reports on more than four million businesses, including both traditional and ecommerce businesses.

Services Offered By The Better Business Bureau

The Better Business Bureau offers two main services to the public, both at no charge to them.

  • Maintains apublicly searchable database of businesses. While the amount of information for each company varies, most contain basic information about the company (who owns it, what it does, etc.), how many complaints have been filed against it, and what visitors to their site thought of it.
  • Offersdispute resolution by allowing visitors to file complaints and businesses to resolve them. On average, about 3/4 of filed disputes will be resolved.

In an effort to maintain neutrality, the Better Business Bureau does not recommend or endorse companies, products, or services.

How are BBB ratings calculated?

Rankings are calculated on a scale of A+ to F, similar to the grading system used in many public schools. There are 13 different points on which businesses can be graded, covering everything from how long the company has been in business to how it handles dispute resolution.

There are two major ways for a company to acquire a bad rating. They can either fail to do things well (such as not responding to complaints in a timely manner) or they can directly make a mistake (such as getting caught up in a problem with the government).

Companies that obtain a bad rating can usually improve it by resolving the problem(s) and sending documentation of this resolution to the BBB.

For a better understanding of how ratings are calculated and how each point is weighed, visit the BBB's overview of the process.

Are consumers influenced by BBB ratings?

Yes. The Better Business Bureau is one of the top 1,000 websites visited in the United States (as calculated by Alexa), and each year they answer over one hundred million inquiries about how local businesses are operating. The BBB would not have this kind of traffic volume if consumers as a whole didn't see it as a trusted, valuable resource.

Thus, consistently having a bad rating can result in significant loss of customers over time.

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