We live in a society that relies on referrals. Millions of referrals happen every single minute of every day. Whether we are involved in a business referral relationship or telling our best friend where to get a good deal, we are referring. There is not a person who hasn’t referred a product, service or company, and has not asked for a referral.

When we need an electrician, furnace repair person or a dentist, we ask around. We ask family, friends, co-workers and neighbors. If one of your family members or friend mentions they are looking for a new car or landscaping company, you will offer a referral because you have had experience with a fantastic company.

I have always seen referrals as a goodwill gesture. I want the person to whom I am referring to benefit from my referral. When I seek a referral, I am counting on a good experience because I trust where the referral is coming from. It’s a two-way street. I want trusted referrals, and I give trusted referrals.

Referrals can also be based on bad experiences. If you’ve had an auto mechanic or home repair person rip you off, you are likely to tell a friend or family member, “I’m not sure who’s good, but I know so and so is not!” So whether the referral is based on a great experience or a horrible experience we like to help the people we know, and we hope they will help us the same way.

I have even gone as far as reprimanding a family member or friend when I needed a service or product. They had a great referral, and didn’t tell me about it, after I mentioned my need only to find out later they knew where I could get great service or a more cost-effective product. Have you ever said, “why didn’t you tell me about_______, when I was looking?

We all want the best deal, the best service, and we look to each other for trustworthy input. Even something as simple as my late grandmother handing me her mouth-watering cheesecake recipe and saying “only use Philadelphia cream cheese, because it’s the best”, is a referral. She used the product, trusted the product and wanted me to have the same experience and outcome as she did. I sure do miss her! OK, that was off track, sorry.

With the incredible pace of growth on the Internet the last few years’s, lots of referral sites have popped up. Looking for an attorney who specializes in ______? Fill out this form and we’ll refer you one. Looking for a dentist that belongs to the American Dental Association? Just type in your ZIP code and we’ll recommend one.

I think we would all agree that some referrals are more critical than others. I think we also recognize that just because they’re listed doesn’t mean they’re good, or best for us, or our situation. Would you rather choose an attorney from a list or have a family member or business colleague tell you they know a great one? The critical referrals, such as health care providers, or people providing service in our homes, or costly services and products, we typically seek out from those around us, who are knowledgeable and we trust.

If we need to know where jeans are on sale, the referral isn’t critical. Asking anyone if they’ve seen any jeans on sale or looking on the Internet through bizrate would suffice. If we get steered in the wrong direction, it’s usually not anything more than an inconvenience. If it affects our health, safety, well-being or finances to a big extent, we would consider referrals critical.

I would imagine that so far, you are with me on this, and would agree about how we refer, why we refer, and what we expect when we ask for referrals. This is where things may surprise you.

What would you think about getting a referral from someone because they were paid to refer that product or service to you? A year or so ago there was some controversy over “Mom” bloggers getting paid to refer products in their blogs. Some were ranting and raving about what an excellent product or service they had, without disclosing they were being paid by XYZ Company. Knowing a mom is ranting and raving about a product or service she is getting paid for is perceived very different than a mom who gets zero compensation for saying she loves a certain kind of diapers, or snack for her children.

The controversy was about full disclosure. If the Mom blogger discloses she is being paid to talk about products or services, at least the readers are aware of it. It’s only common sense to know her view would be at least a little biased if she were getting paid to talk about a product or service. You can Google "Mom bloggers who get paid for referrals," and company after company is recruiting moms to refer products and services for payment.

So now that the subject is brought up, what do you think about paid for referrals? I am sure everyone has a different opinion. Maybe it depends on what’s being referred, maybe it’s just the fact that it’s being paid for, that would either be acceptable or not acceptable to you. Maybe it depends how critical it is to your needs, your personal welfare, and your expectations?

I see more and more websites popping up that offer to provide senior service or care resources. Some of these sites are free, free to consumers and free to companies listing their products and services. Some will offer a basic listing for free with a charge for an upgraded listing. I see nothing wrong with that because websites can cost a lot of money to start and maintain. Then there are the sites that either charge the consumer to have access to their database, or charge companies to list with them. Even further than that, some are charging companies for each “lead”, or referral they provide. The fees to business’ for referrals range, but I have heard it can be anywhere from $12 per referral, up to $65 a referral. Consumer membership fees also range.

Personally I have an issue with this type of referral relationship. The main problem I have is no consideration for the consumer or the type of company they are referring. If the company is willing to pony up the money, they will be referred to. It doesn’t matter if they have a bad reputation, give substandard care or give excellent care. It’s all about money. This offers no consumer protection. Many believe that because a website looks legitimate, caring and knowledgeable, or they have advertised all over the place, they must be referring great companies that are also caring and knowledgeable. Most do not realize or understand that it’s all based on fees.

The other issue I have is those paid for referral costs get passed down. The cost of business is already high. It takes a substantial amount of money to run a business well. Business costs have to be built into the cost to consumers, for a business to survive, and that is normal and within reason, for most costs. As a home-care agency owner I am continuously balancing costs and charges. I know senior care is very expensive. I know that for some it is affordable and for other’s it just isn’t. I do everything I can to keep costs down so we can keep service as affordable as possible. There are necessary costs of doing business, like taxes, insurance, wages, salaries, employee-related costs such as background checks, and training, office expenses, utilities, and yes marketing and advertising costs. You can’t offer a product or service that no one knows about, but even then it's important for us to keep our costs as reasonable as possible.

This is when things like paying for referrals are not only an ethical issue for me, they are a financial issue.

These companies that pay for referrals have found some surprising facts. Some Web-based companies will refer the same consumer to every company within the consumer’s area, and the consumer is bombarded with phone calls, e-mails and materials trying to get them to contract service with them.

I know because I inquired as if I needed care to see how these companies operate. I was literally bombarded with phone calls and e-mails. So if a referral goes to 10 companies, with an average charge of say $25 per company, at least nine companies have paid for nothing. Possibly even 10 companies have paid for nothing, because there is no guarantee that the leads/referrals given will turn into clients. The website company is raking in the money, companies are wasting money, and who is paying? The consumer.

The consumer is paying financially and may be paying with poor service, or compromised safety. Does that mean that every company who pays for referrals is a bad company? No. But you have to wonder about companies who pay for referrals, especially in senior services and care.

I made a decision a long time ago that my Visiting Angels agency would never participate in paid referrals. We love referrals, who wouldn’t? But we want to receive referrals because we’ve earned them through providing a great experience with us, not because we’ve paid someone to refer to us. We feel honored when someone has referred us. We take pride in being the company someone thought enough about, to tell others. I won’t pay for referrals and I won’t accept payment for a referral. I feel this would compromise my integrity and the integrity of my company. The products and services we refer are because our experience has been good, we trust who we refer, and would just as easily refer the same product or service to our own family members.

If it doesn’t bother you to be referred to a company that paid for that referral, by all means ignore everything I’ve said. If it does, you will want to find out how the website you may be looking at comes up with the referrals it does? I would think that any referrals that have to do with senior care or services, health care, or any company that will be coming to your home would be on the critical list of referrals. There are many companies that offer resources for free, and utilizing those companies will help keep the costs of care down. They are trying to help consumers with education and information. But again, no matter where you get a referral, check them out.

While we’re on the subject of referrals, there is another type of referral that can be good or not. That is when a company refers to sister company that is a division of the umbrella company.

Some large companies offer many different products or services under one umbrella company that are considered divisions of the main company. They may or may not have the same, similar or entirely different name, and they typically are run totally separate. It would be understandable and natural for one division to refer to their other division to keep the business within the company. I would think it would be rather strange if they didn’t refer within the company. Here again this is more financially based. Some large companies have completely adequate products or services in each division, and some have good divisions in some of their offerings but not in others. I tend to think that companies that offer too many things have to be exceptional to do them all well. Typically they focus on some divisions more than others, so some shine, while others suffer.

Asy yourself, "Are they referring to a company under their corporate umbrella because it’s best for me, or best for them?" Especially in health care, we seem to never question the referrals we are given from health care providers. We assume they are looking out for our best interest. In many cases I think they are, but not in all cases.

It has never been more important to be a health care advocate for yourself and your loved ones. We have rights, and we have choices, so the better informed we are, the more likely we are to make the best decisions for us and our family.

We will all continue to refer products and services and ask for referrals. For our own protection we just need to think about the basis for a referral, categorize referrals into critical and noncritical, and know we not only have the right to question where a referral comes from, but also we have the right to choose. We are only able to make appropriate choices for ourselves and our families when we have all the information to choose. There is nothing wrong with asking for references or testimonies from any company that has been referred to us. When we asked for, or were given a referral, we expected it to be the best available. We just need to make sure it is.

It is my hope that this information causes us all to think more about the referrals we give and get, and we will be more equipped to make the best decisions we can.

To contact Angil Tarach-Ritchey with questions or comments call Visiting Angels at (734) 929-9201 or e-mail visitingangelswc@comcast.net