Better Business Bureau Explained: A Complete Guide
When deciding whether a business is trustworthy, many consumers turn to the Better Business Bureau (BBB). Known for its familiar letter grades and complaint system, the BBB has been a cornerstone of consumer protection for more than a century. But how does it really work, and how much weight should you give its ratings?
This complete guide explains the Better Business Bureau, its purpose, how ratings are calculated, and how consumers and businesses can use it effectively.
What Is the Better Business Bureau?
The Better Business Bureau is a nonprofit organization founded in 1912 with the goal of promoting honesty and fairness in the marketplace. It operates independently of the government and serves consumers and businesses across the United States, Canada, and Mexico.
The BBB’s mission is simple: build trust between businesses and consumers through transparency, accountability, and ethical business practices.
What Does the Better Business Bureau Do?
The BBB provides several services designed to help consumers make informed decisions and encourage responsible business behavior.
Business Ratings
The BBB assigns letter grades ranging from A+ to F. These ratings are based on factors such as complaint history, business practices, transparency, and how a company responds to customer concerns.
Complaint Resolution
Consumers can file complaints through the BBB website. The BBB forwards complaints to the business and facilitates communication to help both parties reach a resolution.
BBB Accreditation
Businesses may apply for BBB Accreditation, which indicates they meet the organization’s trust standards. Accredited businesses must pay a fee and agree to follow ethical guidelines, including honest advertising and good-faith customer service.
Scam and Fraud Alerts
The BBB operates a Scam Tracker tool that allows consumers to report scams and stay informed about current fraud trends.
How Does the BBB Rating System Work?
BBB ratings are calculated using a point-based system that considers multiple factors, including:
- Number and type of customer complaints
- How complaints are resolved
- Time in business
- Transparency and licensing
- Failure to honor commitments
Importantly, a business does not need to be accredited to receive a BBB rating, and paying for accreditation does not automatically improve a score.
Is the Better Business Bureau a Government Agency?
No. The BBB is not affiliated with any government entity. It does not have legal enforcement power, and it cannot fine or shut down businesses. Its influence comes from public trust and the visibility of its ratings and reports.
This is a common misconception. While businesses do pay for accreditation, ratings are determined separately. Non-accredited businesses can have excellent ratings, and accredited businesses can receive poor ratings if they fail to meet BBB standards.
That said, accredited businesses often appear more credible to consumers because accreditation signals a willingness to be held accountable.
Strengths of the BBB
- Long-established and widely recognized
- Clear rating methodology
- Encourages businesses to respond to complaints
- Helpful scam-tracking resources
Limitations of the BBB
- Not all customers submit complaints
- Some ratings may not reflect recent improvements
- Complaint volume can vary industry
For best results, combine BBB information with other review platforms such as Google Reviews, Yelp, or Trustpilot.
How to Use the BBB to Research a Business
When checking a business on the BBB website, focus on:
- The overall rating and accreditation status
- The number and type of complaints
- How recently complaints were filed
- Whether the business responds professionally
Patterns in behavior matter more than individual negative reviews.
Should You Trust the Better Business Bureau?
The BBB is best used as a starting point, not a final verdict. It provides valuable insight into how businesses handle problems and whether they operate transparently—but no rating system is perfect.
Consumers who use the BBB alongside other research tools are more likely to make confident, informed decisions.
Final Thoughts
The Better Business Bureau remains a trusted resource for evaluating businesses, resolving disputes, and avoiding scams. While it should not be your only source of information, it plays an important role in promoting accountability and ethical business practices.
By understanding how the BBB works, you can use it more effectively—and make smarter choices in the marketplace.