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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 :)
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.
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.
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.
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.
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!
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.
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!)