What are some warning signs that a machine/location sale is a scam
First off - it is possible that 75% (or more) of the offers you see on Facebook, Marketplace, Craigslist, Nextdoor, etc are scams... buyer beware. The fraud rate is so high that I strongly suggest you enter the discussion/negotiation with the assumption that the deal is going to be a scam unless proven otherwise! That's right - I can't stress this enough... assume ALL offers are a fraud unless proven otherwise! So what should you watch out for? Well look over the following list... it is not comprehensive and I update it as I come upon different things... so BUYER BEWARE!
- 1. The seller will not post his price or location publically. They insist on you contacting them directly through iM or some text/email communication. If the ad has very little detail and only 1 fuzzy picture, it is likely a scam.
- 2.The person has no keys to the machines. You should note that if there are no keys; you should strongly consider walking away as you have a HUGE red flag that this is a scam.
- 3. The person won't show you any of the machines without a deposit paid directly to them (or their company). [Note: it is reasonalbe and acceptable practice that some people will require a proof of funds and/or escrow deposit prior to showing the machines to prevent "tire kickers" and reduce the number of people coming to the machines on locations.]
- 4. The person has no documentation of the machines earning potential to back up their claims. Be careful, if the machine makes $600 a week and they are selling you the machine and location for $2500, this is likely a scam.
- 5. You get a gut feeling that the person is not being truthful.
- 6. The person insists on payment before delivery of the machines.
- 7. The person selling the route and machines has no knowledge of how the machines operate.
- 8. The person is selling the location and machine for a crazy low price which is uncharacteristic of that hardware. Be careful about offers too good to be true… if a machine usually goes for $3000 and they are offering it for $750 because they need to sell it fast… that is a red flag.
- 9. Does the person have documentation that they own the machine?
- 10. The person will only give you a 'virtual tour' or insists that you sign contracts before seeing the actual machines. [Note: Its okay to sign an NDA before seeing the machines or location documentation but you should not have to sign anythign further than that type of documentation... and NEVER sign purchase agreements prior to seeing the machines in person!]
- 11. The person asks for a 'Travel Fee' or some cash upfront to show you the machines. I have heard of the seller asking for $175 to show the buyer a machine. This is completely unreasonable and likely a scam.
- 12. Do you feel uncomfortable or is the situation sketchy? Does their story have convoluted story lines... such as needing to move overseas so they are selling everything, the owner died and they are selling it as part of an estate, getting divorced and forced to sell everything, etc...
- 13. If the person tells you they need 20% upfront as a deposit before even seeing the machines... This is not how normal business operates. You need to see the machines and documentation first (its okay to sign a NDA but no money should change hands)... it is likely a scam.
- 14. if they don't have a company website, reviews, and the email domain is different from the company name. If you can't verify the company actually exists outside of its own website through accredited third-party agencies. These are also good indicators that the risk is higher.
- 15. Go to their website. Look for misspelled words with improper pronunciation. There should be lots of pictures of their products being sold. There you should find the CEO info in the section page WHO WE ARE again on the CONTACT page. If it's too private it's a scam.
- 16. The person says things like 'its normal for you to pay a holding fee' ... or insists that your request is unusual to see the machine prior to anything exchanging hands... or says that they dont want to waste their time and insists on some payment before showing you the machine to show you are interested.... you would not prepay for a used car at a dealership without seeing it? Its the same thing for a vending machine!
- 17. When purchasing a location and machine, the seller will not make an introduction to the location manager... or does not seem to know who is in charge of the location to contact. Another issue is to have the sales contract (from the seller) specify that the location has no known issues and the customer wishes the machine to stay on location. (You dont want to purchase a location only for the location manager to tell you shortly after to take the machine away!)
Remember - you are the one buying the machine... you are the one in control of the purchase... until a contract is signed and you hand over the funds... you always have the option to walk away... if there is undue pressure or you feel uncomfortable with the deal - trust your gut feeling... if it does not feel right... it is strongly recommended that you walk away!
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