Slashdot Mirror
Best Buy: 20% Of Customers Are Wrong
Mr Show writes "Ars Technica has an article up discussing Best Buy's strategies to drive off the deal hunters. It's a good follow up to the Slashdot story from back in July, and offers some details on what they're actually trying to do."
The devils are its worst customers. They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts.
Kudos to the people who figured this out, but clearly it is costing Best Buy money. These are customers that should be weeded out. It's Best Buy's fault for allowing this scenario to happen.
Once someone discovers something that is "too good to be true" like the returning scenario, many people start doing it, and the company catches on. Since they're losing money, they stop it.
The other things in TFA, like profiling customers and selling them what their profile dictates is just common sales practice. Sure they might be forcing people to get things they might not want/need, but then again, when was the last time a sales person tried to sell you something you don't need (car options, clothes, dinner specials, etc). It's the nature of capitalism to increase the profits.
Yeah, but I think they've made it clear they don't want your business anyway :)
Looking at sites like CheapAssGamer.com you will see how people turn 10$ into over 200$ buying and selling using price diffrences from stores like Walmart, the notorious GameRush, GameStop, even Electroics Boutique.
One of the quotes I remember the most is "Any experienced CAG can turn credit into cash." Half of all the deals are ABOUT turning credit into MORE credit, while the rest serve the less hardcore and simpily offer cheap games.
Cutting out the hardcore abusers would save these companies tons of money in all kinds of fees, and I am sure they do not represent anywhere near 40%, but likely make up a large portion of those losses.
Sounds like a pretty bad marketing strategy to me. Any sentence with "customer" and "bad" within 10 words of each other will carry a very negative connotation. Best Buy needs to learn from these guys and realize that, although the customer isn't always right, you want people to think you uphold that belief.
There's tons of competition out there, and much of what's sold at Best Buy, especially electronics, is second-rate. Shop around, search the web, read what other people say about a product, and don't shop on impulse. Avoid regrettable purchases, save money without Best Buy's dubious rebates, and be happier with less under-used junk cluttering closets.
-- "Makes Little Debbie look like a pile of puke!" - Moe Szyslak
I wonder to myself ... what customer gave feedback that they wanted to the program to be more difficult to earn rewards?
I'm sure everybody who reads Slashdot has been in the position of being asked by their non-geek friends and family about potential purchases... so the customers that Best Buy sees as losers may have a bunch of profitable customers behind them that they could very easily send to Circuit City instead. I wonder if Best Buy's models take that into account.
As anyone who has worked retail can tell you, far more than 20% of customers are wrong.
AND NO THE ITEM ISN'T FREE JUST BECAUSE IT DIDN'T SCAN. YOU ARE NOT WITTY OR CLEVER.
Any retailer with a brain, so to speak, has people working in loss prevention. And of course, they want to eliminate fraud. The first level of defence is, of course, with employees. Then, its with customer policy, and finally, with best buy, its with the actuall customer base.
This is probably a very intelligent scheme, and certainly the first of many from America's electonic retailers.
The thing that worries me the most about this policy is the concept of quickly "pigeonholing" customers and treating them a certain way depending on how you have categorized them.
As a young adult, I run into plenty of prejudice among employees and managers (though most of it is annoying rather than seriously detrimental). Would they look at me, and decide, "Here is a young person. He doesn't have a lot of money, so we're not going to waste time helping him find what he wants, since he probably couldn't afford it anyway."
What if they do the same thing based on ethnicity? or noticable disability? or a myriad of other potential factors that go into stereotyping?
All I can do is hope that the free market will sort things out, and prove to Best Buy that this policy is hurtful to customers.
Love the Third Amendment?
They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts.
I wouldn't even stretch to call people who would do this shoppers. Thats not looking for the best deal, thats borderline robbery. If you engage in that sort of activity, I'm sure you promising to never shop there again is exactly what they want. Win/win.
They said they are putting their employees through hours of training on how to interview us customers.
Shouldn't they be training them on the stuff they sell?
Everytime I go in there to buy a camera, I'm usually faced with a deer-in-headlights sales man who only know how to say, "I'm sure it's in the manual." And I end up helping the poor helpless chap next to me who thinks a 9 mega pixel still camera will produce wide screen movies!!
Get real Best Buy!
Another trick Best Buy has is the extended warranty. It sounds like a great idea, and it is. Extended two year warranty, no questions asked, for a few extra dollars. However, you need the warranty receipt. Most people lose it after a few months, usually sooner, or totally forget about it. Two years is a long time. Only a small percentage of those who get the warranty actually cash it in so to speak. That's where a lot of their profits are coming from.
People scamming the rebate schemes is a valid response to what is, in essence, a totally anti-consumer practice. I'm amazed that it's even legal to offer these false discounts, and artificially inflated prices.
The next time I go into Best Buys (or Future Shop in Canada; they are the same company) I am going to try an act like a Barry or a Buzz and see what kind of interest I get.
/. has got to be a bad deal for them.
It seems that the publishing of this info is going to hurt Best Buy the most. If they were to target their *devil* customers and kept it on the lo-down, maybe nobody would have noticed. Having it on
Thanks for the idea about getting a rebate (although I still hate them) and then returning the product. That's a great plan. I'll be sure to try it out this weekend.
Good customers want good service and good merchandise, and good value for their money. They'll leave in a heartbeat, if they think they aren't getting all three.
Bad customers want all of the above, but they are incredibly price sensative, and they'll compromise service, quality, and perhaps value to get the lowest price. The one way to get rid of bad customers is to raise your prices. That won't drive off the good customers if you keep the value for money up where it belongs.
Why doesn't Best Buy try that? Probably because most of their customers are the bad kind.
See what I've been reading.
I fit the profile of a "bad" customer: I watch the rebates and advertised prices and make sure I'm not paying more than I have to. They probably want to be rid of me. But, when it comes to computer parts and systems, a lot of my friends who fit the "good" BB profile come to me for a recommendation. If BestBuy's been pushing me out, you can bet I'm not going to recommend going to them. End result: annoying me, the "bad" customer, causes "good" customers to end up somewhere else.
People are abusing those benefits Best Buy provides.
Using every loophole available isn't abuse. Its business. Do you think Best Buy's accountants look at some obscure tax regulation and say "well, this would save us alot of money, but it really wasn't meant to be used this way"? I don't think people owe corparations any more moral consideration than corporations typically excersize towards people.
They don't make a profit without their scam extended warrantee?
Compare their prices to prices from NewEgg or TigerDirect.
Not a Twitter sockpuppet... but I wish I was.
"I'm sorry sir, you can't order the all you can eat unless you weigh less than 175 pounds"
I totally agree.
Why is it acceptable for a business to play the government's rules, but it is not acceptable for the consumers to play the business' rules?
Self-interest is what drives capitalism. Best Buy can suck it.
Sorry. You're not making any sense. I bought a 3500$ tv which only had 1 year warranty on it. It stops working 366 days after buying it and costs 2000$ to repair or worst case, I have to replace it, that 300$ 4 year extended warranty is going to seem pretty cheap. The interest on that 300$ would have to be abnormally high to pay back the repairs. You're right, it's insurance, but I'll go with that insurance over 300$ + 30$ per year insurance that will basically cover only the time if something happens.
wtf?
I knew this would make them come out of the woodwork.....that certain demographic of people who somehow think that the only fair price, is the
There's more to shopping then just price folks, and that attitude is exactly what led us to the situation we find outselves into today. There used to be a large number, of helpfull, friendly, local audio / tv / computer stores....but over time people passed them up to go to a larger box store...then an even larger box store and now these.
What motivation does a business have to provide good service when they know their "clients" would abandon them in a heartbeat just to save a few pennies on the dollar? Then..
Hmm...hadn't meant to turn this into a rant...but I guess it just kinda headed that way.
-Chris
--an unbreakable toy is useful for breaking other toys--
What they're hoping for is that you'll buy the item at the in-store price, then not bother to go thru all the yadda-yadda that you have to go thru and wait six to eight weeks to get the rebate. A rebate is a way that a retailer can make an item look as though it costs less than it actually does; they don't actually want to sell you the item at the lower price. If they did, they would, as you say, simply mark the price down.
That's pretty funny (and probably true, your post even puts a picture in my head... *shudder* :)
But there are actually legitimate reasons why people would want those sorts of components. Namely if you are a hardware experimenter. I bought a good number of pieces of "throwaway" equipment at Goodwill Computers in Austin because I wanted to rip a rare component off of it, take its connectors, or even just have a piece of test equipment (one of my projects involved building an ISA bus).
It had nothing to do with the price, I probably would have been willing to pay more than the going rate for an equivalent piece of modern equipment in some cases. Finding a store that actually stocks that stuff is pretty hard these days. After I moved away from Austin I ended up having to wait until I took a visit back there to get some stuff like that!
Cryptic Allusion - New Mac and Dreamcast Games!
Sorry, you are thinking short term: you are assuming that whatever it is you bought WILL fail within the extended warrantly period.
Now, most devices won't actually fail. So, by taking the money that you would have spent on the extended warranties for your car, tv, fridge, and others all together, you will have a fund that will pay for the smaller number of devices that do actually fail.
This is just what an insurance company does. You are doing just the same, but cutting out the profit margin taken by the store and the insurance company.
Of course, you don;t need to actually create the fund --as long as you can pay for repairs and replacements as and when things fail. Nevertheless, your finances will benefit from NOT having bought unnecessary insurance.
Think of it this way: haven't you heard that you should buy insurance only for the things that you CANNOT afford to replace. In most cases, these extended warranties fail that test.
The real "Libtards" are the Libertarians!
And this is the problem with big companies. They never look back at themselves to realize most of the scammers are employees. Until they realize that, they wont solve anything.
That is why what you create must be foolproof and have no back doors. Because its the people inside that will be the first to exploit it. And of course make it look like an outside job.
here's an idea: charge a "fair" markup on every item, and give the best damn service possible.
hi, welcome to costco.
... hi bingo
There is no purpose whatsoever to mail-in rebates except to steal money from customers. Not a single one. Sometimes they're just stealing from the lazy and actually give ten dollars to people willing to spend a few hours to get everything in order, sometimes they create impossible processes, sometimes they just outright never send the money and hope the customer has forgotten about it two months later.
Maybe if more people abused them they'd stop advertising them as actual prices, or even stop using them altogether.
If corporations are people, aren't stockholders guilty of slavery?
This sounds interesting until you realize you can replace your words with any of the following:
- market / supermarket
- Sears & Roebuck catalogue
- QVC
- Amazon.com
- Caldor
You're describing the retail cycle. It's been going on for the past couple of hundred years. Don't mean to troll, but there will never be "one" way to sell something.
Small potatoes make the steak look bigger.
Fah, Best Buy had a problem with customers buying an item, applying for the rebate, returning the item, and then coming back into the store to buy the same item after it was marked down as a return.
If that's not a devil customer, I am not sure who would qualify.
What Best Buy has done is change their practices to cut down on the amount of outright abuse. Personally, mail in rebates tick me off, so I am not about to spend my money at Best Buy, but I can understand why they would change their policy. I would also bet that most people won't even notice the difference. The only people that care are the Devil Customers that were abusing Best Buys' policies.
If you are hostile towards your customers (like the ??AA) your revenues will shrink, and you will find yourself in a viscious cycle fighting with your customers and losing money in the process!
Several years back, when the Diamond was a big name in the video card market, and 3dfx was the king of the hill, I frequented comp.hardware.ibm.pc.video -- many of the forum regulars made no bones about the fact that they were devil customers: They purposefully would "buy" a video card, hold it for just under the return period, and then return it. They'd get a full refund of their original purchase price which they'd use to buy whatever was new (again starting the return clock anew). These customers are hugely costly for retailers -- it would be better not to have them as customers (in fact you wish them on your competitors). This sort of person will rationalize their behaviour (much like the cable modem user who rationalizes saturating their connection 24 hours a day) under the guise of "if they let me, let them suck it!", but the end result is naturally restrictive policies that hurt everyone because of the abuses of a few. Simliarly it isn't cost effective to have customers who'll bogart your salespeople's time for hours while they ruminate over a trivial decision -- one which they'll likely recant on, reappearing in your returns line. These people do exist.
What Best Buy has done is change their practices to cut down on the amount of outright abuse. Personally, mail in rebates tick me off, so I am not about to spend my money at Best Buy, but I can understand why they would change their policy. I would also bet that most people won't even notice the difference. The only people that care are the Devil Customers that were abusing Best Buys' policies.
Instead of instituting things like "restocking fees" and draconian return policies which effect ALL customers, both angels and devils, why doesn't Best Buy actually institute policies to address the core problem.
If people are buying items, collecting rebates, and returning them, why doesn't Best Buy just deduct the amount of the rebate from the credit? Simply match up an ID number on the return receipt with an ID number from the submitted rebate receipt. If the rebate has been submitted but not processed, simply flag the rebate in the system as denied, so the person doesn't receive the rebate after the fact.
Those are just two ideas off the top of my head that will solve the problem without alienating your "good" customers.
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www.moneybythenumbers.com
The best way to combat the new policies I've found is to use their 'double points' offer for using the Best Buy CC.
The best example is when buying a video game. I go in to pick up GTA:SA, get the game, and get one of their 'Gamer Giftcards' (a coupon on the back of the case gives you 5 dollars off a game price $20 dollars or more). You go up to the register and make a pile for the gift card, and then leave the out of reach of the clerk. You buy the gift card using your Best Buy CC, putting fifty bucks on the card. This gives you $100 dollars towards the new minimum. You then take the gift card and the aforementioned coupon from the gift card case and proceed to check out with the game. The coupon from the back of the gift card takes care of tax (effectively) and you use your reward zone card with the gift card to buy the game, giving you $150 towards the new minimum and earning you $5 in Best Buy bucks for a $50 dollar purchase.
The decent clerks just get pissed about having to do two transactions and send you on your way, but the extra time this takes is more than made up for by the joy in watching someone who takes clerkin' at Best Buy way too seriously scan your cards over and over again trying to figure out a way to prevent you from doing this. I love leaving their checkout and looking back at the line that has formed behind me while I give them the old lady with a coupon act.
Just out of spite, any purchase over 20 bucks now results in a gift card purchase first.
Basically, I think what this means is: SHop at retailers you like. Don't like Best Buy? Don't shop there. Don't give them your money. But don't bitch about it! I don't shop at Amazon, I don't like them because they put small book sellers out of biz. If I need it by mail, I shop at Powells.com (If you have ever been to Powell's Technical Books in Portland, it's just ORGASMIC).
"Who are in control, they are not in control of anything - they don't even control themselves!" - Glen Beck
I hate mail in rebates. It's just a way of giving the government more money. Let's say you buy something for $100 on "sale" for $75. Only trick is you've got to pay tax on $100 in order to buy it, for $75!?!
In Canada that's 15%. So instead of paying $11.25 in tax you are paying $15. So your sale prices of $75 is actually $78.75. I know it's only three dollars, but dammit I'm cheap!^H^H^H^H^H^it's the principle of the thing!
Not only that, in order to get the mail in rebate it costs you postage. There's another 50 cents. And my time. (That's gotta be worth at least $20 per hour flippen burgers, so it takes me 5 minutes to fill in the stuff. 5 minutes to find a stamp. 15 minutes to walk down to the mailbox, 15 minutes to walk back.)
Hey this rebate is COSTING ME MONEY!
Hey Best Buy/Future Shop! Why not just put it on sale if you want to put it on sale. Why give your consumers more problems. One of the reasons I perfer to buy from the small independants. (No I'm not a devil customer. I'm not a customer at all!)
I've noticed that anytime someone makes something more cost-effective (self checkout, for example.) The customer never benefits from the extra hardship.
That's simply not true. An obvious example is the internet, and how it made shopping easier. Because it's easier for the supplier, new suppliers came around with lower prices, and forced everyone's prices down. Stuff is cheap, and it's a lot easier to prevent yourself from being ripped off (i.e. something is way cheaper somewhere else).
It's fashionable to critisize corporations as if they have all the power over us, when the opposite is more true. Corporations certainly have problems (why do shareholders get immunity from liability?), but they DO bow to customer demand.
Social scientists are inspired by theories; scientists are humbled by facts.
It is their problem, because he won't shop there again. And 200 people who read what he said will think twice, too.
What is your estimate of how much money this one Slashdot story lost Best Buy? Mine is $2,000,000.
Leave out the "ratty old clothes" next time and see what effect that has.
Free Hans!
If you frequent any kind of hardware forums, you'll see that it still happens all the time. In fact, it happens worse than that.
At least the DCs in your example returned a working card, which could then be resold. Though, yes, they had incurred other costs to the company.
The ones I'm running into are the kind that will _break_ a card or a CPU, for example via extreme overclocking and overvolting (i.e., thermally fry it) and then RMA it and ask for a replacement.
Or install some ludicrious cooler on it, mechanically break the card in the process (e.g., crunching the siliconm but damaging the PCB also isn't impossible for the determined overclocker.) Then put the stock cooler back on and RMA it. On account that it's nigh impossible to prove what's really been done to it.
I've seen into advice which even was as cynical as to state "yeah, AMD will know that you thermally fried the chip, but they send you one replacement anyway. So go ahead and raise the voltage as high as the motherboard lets you. It's safe. You'll get a replacement chip from AMD."
Which, sorry, is as dishonest as it gets. It's actually planning to mis-use and probably break a product, then shaft the company to pay for their hobby.
What can I say? I'm thoroughly disgusted.
A polar bear is a cartesian bear after a coordinate transform.
shopping carts cost $100???
Have a look at your neighborhood shopping cart. Those chrome plated wire mesh suckers with a weld at every joint. Take the time to sit in one and roll around. I don't know what they are rated for but they can support the weight of two adults easily (don't ask). These suckers are not cheap, think $500/$1000 a unit easily. They don't look like much but alot of work goes into that shopping cart.
There is no sanctuary. There is no sanctuary. SHUT UP! There is no shut up. There is no shut up.
"Grocery stores usually operate on razor thin margins, too--their profit is maybe one or two percent of sales. "
That's the scam they pull.
Grocery stores are set up with a master distribution system that is one paper company with each store being another paper company.
The distribution center sells at what amounts to a premium to the grocery store and makes the profit. The stores themselves sell at a slight margin (as you mention) and then either break-even or lose money.
Why? Because there are tax benefits to being set up this way. Its a way to increase profits.
This is not illegal or immoral, but please... save the sympathy for the homeless.
I actually think that's great. I run a small retail store and I always have to remind my employees that promotions are in place for a reason. The customer is NOT ripping us off by using them. If I didn't want them to be used I wouldn't run them.
This is yet another example of a big retailer trying to satisfy the corporate goal of more, more, more. I work for a supplier to retailers such as Target, Dillards, Ace Hardware, WalMart, and many others. Our product does well, but we are required by some that if the consumer returns the product, we must take it back and give the retailer all of their money back.
Bed Bath Beyond is the biggest culprit of this. So they give us a forecast of what they want for Christmas and if they are wrong, they make us take back all of our product that did not sell. Last year we had to cut an employee because Bed Bath over estimated their sales. Just because they did not want to look bad on Wall Street.
This year we are not selling to Bed Bath. We are one of the few vendors that have refused to sell to Bed Bath Beyond...according to them. This will hurt you in the long run because of higher prices and if you work for one of the vendors to a big retailer, you are living by their marketing scheme. If it is bad, watch out for your job.
Take your Knoppix (or whichever distro your prefer) LiveCD and boot the display laptop in the store. Should be a pretty good test of hardware compatability prior to acutally purchasing the machine.
Give a man a fish and he will eat for a day.
Teach him to eat and he will fish forever.
A link is hardly attribution.
How many people wvwn know how to decode it. For that matter, how many readers will even know that it *is* a link, much less follow it?
You can't take the sky from me!
Have you ever been to an Aldi's? It's an ultra cheap grocery store chain in the US. They don't have baggers and often only have 1 or 2 cashiers on duty. Staff is a minimal. Here's the kicker: I've never seen a discarded Aldi's shopping cart. They are always nicely and neatly put away. Even with no baggers to round them up.
ALWAYS!
Do you know why? In order to get a cart you have to put a quarter into the lock to get them out. When you are done, you can get that quarter back if you put your cart back. Only if you put the cart back.
What does that tell you about humans and their values?
Star Pirates