There is a company that has an almost permanent presence on the Queens College campus. Its recruitment posters show up without fail in hallways and classrooms, proudly advertising part-time work with a payment that, at first glance, appears to exceed the minimum wage. This company, Vector Marketing, even features a complimentary quote of a student from our college on their website!
All three of these images are from the Vector Marketing website.
Quotes like this make the company sound wonderful on paper. But as a little bit of research shows, things are much shadier beneath the surface. These reviews of the company on Glassdoor.com offer some insight into what it is really like to work for Vector. While many of them are positive, many are also quite negative. A number of the former employees accuse the company of being a “pyramid scheme”, as you can see by viewing the reviews filtered for that phrase.
Let’s get to the truth about Vector.
Vector Marketing sells a brand of knives called Cutco. They put up posters like this all around college campuses, with special versions for Summer work, and even go so far as to send out recruitment letters directly to student’s mailboxes. (I can testify to having received two within my first year of college.) You may be wondering what about this company is so controversial that would cause people call it a “pyramid scheme”- isn’t it just trying fill typical sales representative positions? Not true. The kind of jobs they are offering do not offer any kind of stable hours or wages. The flashy $17.50 on the poster makes one think otherwise, but note that it says not “per hour,” but “base appt.,” short for “base pay per qualified appointment,” meaning that they will pay you even if you don’t make a sale, but will give you a commission if you do.
The kinds of sales appointments they are referring to are presentations that you have to make to people that you know. The company lends out a sample kit with a “retail value of $425.” (For the sake of comparison, Bed Bath and Beyond sells sets of knives for only $59.99.) Sounds like an incredibly hard sales pitch to me, which is probably why they have a “base pay” even if a sale isn’t made, with a commission paid if a sale is made. But let’s assume that Cutco knives are, as the company claims “the world’s finest cutlery” (spoiler warning: they’re not). How much money can students actually make by working for Vector?
A 2003 article by Consumer Affairs showed that “David Tatar, a supervisor with the Wisconsin Consumer Protection Dept. was quoted in 1996 by the Washington Post as saying that ‘the state surveyed 940 Vector recruits in 1992 and found that almost half either earned nothing or lost money working for Vector’ and ‘workers in that state earned less than $3 a day on average selling cutlery for Vector.'” That is just unforgivable. Especially, when you consider how students at public colleges, like Queens, are particularly vulnerable to this kind of “job”. There’s a reason that “Flexible Schedule” is so prominent in the poster-it can be hard to come by an employer willing to accommodate the schedule of a full-time student. It would be one thing if Vector was advertising for volunteer positions, but they clearly emphasize that this is meant to be paid work, and thus it must pay an equivalent to the minimum wage-it’s habitual refusal to do so has led to settlements that I will mention later.
The article, which was written by an organization called Students Against Vector Exploitation (SAVE) may be admittedly biased-but facts are facts. They even mention that “Workers are hired as independent contractors” meaning that they are not considered part-time employees of Vector, likely a way for the company to justify not paying the minimum wage or offering scheduled work. According to the IRS, “If you are an independent contractor, you are self-employed.” So the poster, with the headline “PART TIME WORK”, is blatantly lying! Furthermore, “Lauren, the co-founder of SAVE just recently won a case with the NY Dept. of Labor alleging Vector to have breached the independent contractor-client relationship making her an employee, and Vector has sent her a check to compensate her work during unpaid training. She says ‘I know others can win too, it’s just a matter of standing up for your rights.’ Vector has been embroiled in multiple other lawsuits, including Harris v. Vector Marketing Corp. in 2008 and Woods v. Vector Marketing in 2014, both of which resulted in settlements paid out to former salespeople in California from the former case and the in five states from the latter case. It is incredibly surprising that multi-level marketing schemes like this are even legal in the first place.
This Investopedia article explains some of the differences between multi-level marketing (MLM) and illegal pyramid schemes. One of the most important distinctions is that MLMs are primarily focused on selling a product to customers, whereas pyramid schemes are all about recruiting more people to pay into the scheme. The article notes that The Federal Trade Commission (FTC) investigations have uncovered a number of similarities that make it difficult to draw a line of separation between the two. Significantly, the industry data shows that “there are 90 million members worldwide[of MLM companies] but relatively few earn meaningful income from their efforts. To some observers, that reflects the characteristics of a pyramid scheme.”
I must say that wages of less than $3 a day on average make the $7.25 federal minimum wage look good. That pittance will not help students pay for tuition or books or transportation, or anything really. At least Vector no longer charges new recruits for the sample kit. In 2003, when the Consumer Affairs article was published, they would have to “either buy or put down a deposit of at least $145 for a set to give demonstrations with.” Have you ever heard of a job where you have to pay your employer to just get started?
That article certainly isn’t the first one to call out Vector for their shady and predatory practices. The author shows how “The Toronto Star wrote an article about fraudulent job advertising in 1994 and wrote that they decided not to run Vector’s ads anymore. Lewis & Clark’s college student newspaper in Oregon wrote an article in 1997 calling the company a ‘scam’ and interviewed a receptionist alleging she was told to deceive students over the phone.”
Remember when I said that Cutco knives aren’t the best? In a review of Cutco knives for www.onlyknives.com, the author writes, “Cutco blades are made from 440A stainless steel. 440A is not exactly tin foil, but it’s by no means a high-end steel. 440A is often used by knife manufacturers in their “value” knives, when cost is their biggest concern. Consumers should think twice before choosing any knife that uses 440A, let alone one that’s very expensive.”
The reviewer also poses the question, “Are the sales reps fully qualified to sell the product they represent?” and illustrates how “Selling high-end knives requires an in-depth understanding of metallurgy that many salespeople do not possess…Many Cutco buyers are unfamiliar with high-end knives and of the science that goes into making a knife, so it’s easy for them to misinterpret claims that a salesperson might make.” Maybe that is why the Vector website claims that “most people buy” their overpriced knives. They may have no idea what they’re buying, and might just feel bad for the salesperson, who is often someone they know or even a family member.
The knife reviewer also linked to a forum where the kitchen knife expert, Chad Ward, puts it bluntly, “Friends don’t let friends buy Cutco. Hell, I wouldn’t let anyone buy Cutco.” Very well said! I would also add that friends shouldn’t let friends be “hired” by Cutco either. And Queens College should certainly have the sense to tear down every single one of their posters on its property. Advertising for Vector is endorsing Vector, and a company with such an atrocious reputation has no business being represented on our campus.
If you want to learn more about Multi-Level Marketing, I recommend watching HBO’s John Oliver tackle the subject here.