The Better Business Bureau, commonly known as the BBB, is a non-profit corporation that was established in 1912 with the purpose of advancing consumer trust in the marketplace. This is done by assigning a business a letter grade between A and F, with A being a trustworthy establishment, and F being less desirable. Part of the function of the BBB is to help businesses and consumers resolve disagreements, and they are successful in approximately 75% of cases. Additionally, their database is available to the public to search for business information, including owners and their history of complaints.

What elements does the BBB use to rate a business?

The elements that the BBB uses can be found on their website, but are summarized below.

1. The history of complaints with the BBB. The BBB will consider the complaints against the business, while taking into consideration the businesses size, as well as whether or not the business has made a good faith effort to resolve said complaints.
2. Type of business. If the business itself may create issues within the marketplace (or works outside the law) then the business may receive a lower score.
3. Time in business. A business’s rating is affected by how long a business has been in business.
4. Transparent business practices. The BBB requests information about a business’s products and services, as well as ownership, and address. If any of the information cannot be determined, a business may then receive a lower score.
5. Failure to honor commitments to BBB. If a business fails to honor their commitment to mediation or follow through with other forms of resolution, they may receive a lower score.
6. Licensing and government actions known by BBB. Though the BBB does not routinely check on businesses not accredited by BBB, they will do so on businesses seeking or currently accredited by the BBB.
7. Advertising issues known to the BBB. When a business faces advertising challenges through complaints filed through the BBB, if they are not answered or addressed accordingly then they risk a lower score on the BBB ranking.

How does the BBB calculate ratings?

When a BBB ranks a business, they take into consideration all of the elements listed above. A business that fails to do business well, or a business that routinely makes mistakes (i.e. in advertising or in transparency) is going to receive a poor score. It is important when starting a new business to work together with the BBB, because consumers are influenced by a businesses BBB rating. If a business does take a hit on their rating, they can improve that rating by resolving the issue and communicating that to the BBB.

In some instances, a business may not have a rating. In those circumstances it is due to the business not seeking BBB accreditation, and the information not being on file. A business that fails to seek accreditation through the BBB is not penalized on their BBB rating.