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You’ve heard the phrase said thousands of times. Change is a part of life. When you purchase something from a company, you understand that caveat emptor applies. The rules when you buy might not remain in place down the line. It’s why companies add all those terms of service updates that you never bother to read. They’re making changes to benefit themselves, not their customers. This week, a certain segment of Disney’s most loyal customers are dealing with such a situation. Here are several facts you need to know about Disney’s latest ambush of their devoted fans.

A different kind of April Fools’ Day

Image: Disney

A few months ago, The Walt Disney Company announced that members of the Disney Vacation Club would receive new identification cards. On the surface, this sounded innocuous. Disney dropped in an odd caveat toward the end of the statement. They casually mentioned that current membership cards would expire on April 3, 2016. My wife remarked that it was an oddly specific, seemingly random date. She jokingly wondered what doomsday event the company had planned for April 4, 2016. As fate would have it, that “joke” demonstrated shrewd instinct about how a major corporation runs their business.

Disney has always had an issue with the resales market, something I’ve discussed before. Savvy buyers understand that a DVC resale costs a fraction of the cost of direct purchase through Disney while adding largely the same benefits. That’s why DVC resales have enjoyed a sales explosion over the past year. Prices have spiked in a way that hadn’t happened in the 25-year history of the DVC.

The issue is that Disney doesn’t earn a dime from such sales, at least not explicitly. The implicit revenue boost comes from the other things DVC members purchase when they visit a DVC property. Disney doesn’t lose out completely when someone buys resale, but the opportunity cost their accountants identify is at least $110 per point. With tens of thousands of points purchased via the resales market, the revenue lost via opportunity cost is so large that it creates a ripple, even on a spreadsheet as sizable as The Walt Disney Company’s. 

Class warfare, Disney style

Image: Disney

In March of 2011, Disney announced its largest alteration of the DVC membership agreement in the two decades of the program. They notified current and potential customers that DVC ownerships purchased via resales would lose access to some member benefits. Various Disney properties that don’t participate in DVC are still technically available for rental via the Adventure Collection, Concierge Collection, and Disney Collection. Disney changed the rules of DVC to restrict hotel stays at these properties to members who bought points directly from Disney.

On April 4, 2016, barely five years after the first time they did so, DVC fundamentally changed the rules of their membership program once again. This time, the change is more aggressive. Disney is no longer willing to sit on the sidelines and watch apathetically as resale dealers enjoy record sales. Without any warning, the company altered the DVC program. Customers who purchase via resales no longer enjoy Membership Extras afforded to direct buyers. In other words, anyone who tries to save money through a resales acquisition of DVC membership now enjoys fewer benefits despite the fact that they’re participants in the DVC program. Yes, current members are grandfathered in with the same rights and privileges that they had in 2011. Still, it’s the latest example of Disney favoring the customers who spend more money with the company over the ones who are more budget-conscious.

That was then, this is now

Image: Disney

Two important aspects of this announcement merit further discussion. The first is that Disney handled the announcement differently this week as opposed to what they did in 2011. Five years ago, the corporation proclaimed the changes far enough in advance that they gave customers a chance to allow for the difference in policy. Disney afforded potential customers with the opportunity to beat the deadline, thereby avoiding (additional) harsh feelings about the change.

In 2016, Disney offered no warning. The only hint was that oddly specific expiration date for current membership identification, something I’ll discuss further in a moment. Their lack of alerting DVC owners has caused quite a stir within the insular DVC community. At best, it’s a thoughtless announcement that agitates even the most loyal members. At worst, it’s a malicious attempt to enforce new rules on customers who had already finalized their plans for 2016 vacations at Disney resorts. Due to the structure of DVC, members must book their rooms several months in advance. The majority of program participants book between seven and eleven months in advance.

Think about the situation from the perspective of someone who followed these rules. A person who booked a May vacation to Walt Disney World late last year would have reasonably expected a lot from their vacation that they won’t get now. There’s no Star Wars weekends, the new Frozen attraction won’t be open, Soarin’ Around the World won’t debut in America until after its global premiere at Shanghai Disneyland Park, 24 Hours of Disney isn’t occurring this year, and Rivers of Light is officially delayed until at least June. On top of all the disappointment of that, DVC members now discover that the program actively considers resales buyers second-class citizens.

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Comments

I don't know anything about the DVC since I live close by to Walt Disney World I never really looked into it. But I really don't like the decisions that the corporation is making lately. They seem to have gone deaf to their customers and while they have always increased their prices they are now starting to squeeze their customers on the other end and giving them less for their dollar as well.

In reply to by Andrew (not verified)

Andrew, is it me or did it seem like they didn't changed prices much in 2013/2014, and they are trying to make it up now? We were there over Christmas 2015 and while I know it is a very bust time of year, the cast members seemed to "hustle" us in and out of meals. We go every 18 months, but this time just seemed different.
They have lots of bills to pay with all the work going on at the parks.

Not sure I disagree with the Mouse. This is no different than an airline or other business zeroing out their frequent flyer cards because of costs that had been affecting their bottom line.

Much more money involved, and is is bad for those that entered into unfinished agreements (who since the conditions of sale/agreement changed they technically could pull out of the sale, and if that clause is not in their purchase, shame on them) or those with plans already made.

It is a business...

There is at least one major misrepresentations in your article. The hypothetical person who scheduled a Disney Vacation late last year for the May is NOT affected at all by these changes. If they booked on points late last year they obviously purchased their points via Disney or via Resale at least 6-9 months BEFORE April 4, 2016. How could they have lost any benefit to their purchase? Disney has grandfathered that person.

As an owner who has bought ONLY through Disney, but have looked at adding on from resales, I do not think it is unreasonable for Disney to expect you to have bought at least some portion of your points from them directly. If you want to pay less for points then you have to weigh the opportunity cot versus the actual cost and make that determination for yourself. We do this all the time whether it is buying a new car with a warranty and undepreciated value, or a used car with less or no warranty and depreciated value.

While this move does potentially decrease the value of my points on the re-sale market, I totally understand the business decisions made by Disney, and I like the fact that since I paid more, that I get more than those who buy exclusively on the resale market. As my wife and I have discussed many times, if we chose to add-on through a resale then we would use our Disney-bought points on cruises, and use the re-sale points at Disney. A totally reasonable use-case considering the money i would be saving on those points.

SO .... As one who paid the "big bucks" for DVC it pains me to hear you whine about a loss of a 10% discount when in your words you "paid as much as less than $60 a point" which is A LOT more than a 10% discount over original owners. I wouldn't say "second class" just not an original owner. I've never commented on any post before but you've made me think Disney should go even farther for those of us that bought directly from them. Maybe something that actually benefits those of us who helped build DVC. Allowing "used point" members a 7 month Home resort window and a 5 month (I'll be kind!!) any other resort reservation window. As a Member since 1996 , with 3 Home resorts, there is no spontaneity anymore. Too many people planning so far ahead. What a difference it would make for Members who didn't get that discounted price to actually have a chance to stay where we want without having to plan 11 months out! Not second class members but second "rate" members. It would be great if DVC actually cut real benefits that would make a difference to original members!!! Be careful what you whine about! What do you think original DVC owners???

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