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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."
I love these huge companies that cant take it when the average joe bites back a little. We all hate mosquitos but we have to deal with them. If they are gonna keep this "hate" up then they will lose my money plain and simple, maybe we would be nicer if they weren't trying to shove a warranty down our throats on every little item we buy.
Ubuntu- Linux for human beings.
What they are basically saying is that 20% of customers are wrong "for Best Buy." In essence, they are trying to rid themselves of intelligent shoppers who look around for the best deal and are usually more knowledgeable about what they buy and instead cater to the sheep and the unwashed masses that will buy anything regardless of features and price simply because a Best Buy salesman tells them too.
This is yet another attempt to dumb down consumers to make the more receptive to truly weak sales pitches. Best Buy won't be getting any more of my business if they value this philosophy.
cLive ;-)
-- Trinity in high heels carrying a whip: The donimatrix - there is no spoonerism
Best Buy's rebate scams are among the worst in the industry. I've been told that something would be free after rebate, only to find out the rebate expired a week before I purchased the item.
BUT we still hate BB for calling the cops on customers who ordered stuff on their website.
Religion is a gateway psychosis. -- Dave Foley
Having worked retail as a profession for 9 years, most sales staff do not have the ability to help me. They're not skilled enough. Therefore I have an easier time if they don't bother me. Luckily most of them do look at you and make decisions, so I usually use my "annoyed and disinterested" face to ward them off.
Most of the time I find consumers know more than the sales staff because the sales staff at most places are not paid high enough to have high quality sales staff.
Not since Marie-Antoinette played milkmaid has looking simple and honest been so fake and complicated.
This is the biggest "scam" of all: selling "extended warranties". I nver buy them and use the rationale of self-insurance.
These "extended warranties" are an insurance policy. The buyer is buying insurance, not a warranty.
Question: why buy insurance if you can insure yourself. Think of it this way: most people could afford the loss that the insurance covers, so, if you really want to be anal about it, instead of buying the insurance, put the money into an account. Pretty soon, that account will have sufficient funds in it to cover any losses that you could possibly imagine an extended warranty covering. The difference is that it now YOUR MONEY, not the insurance companies'.
You will be in effect, your own insurance company.
There is a small, but finite chance that over the long term you will be worse off if you self insure, but I think most people would acknowledge that the risk is small in comparison to the gain.
Since, for many sales by Best Buy and others, there is no profit on the sale of the item itself and only the extended warranty provides all of the profit, that's why I will never be the sort of buyer Best Buy are looking for. Of course, I can always let a sales assistant THINK I'm going to buy the warranty, right up to the time comes to actually pay!
The real "Libtards" are the Libertarians!
This unfortunately is not surprising. One thing I have noticed about modern corporation customer relations is that when the customer is clearly going to be screwed, they always try to spin it as some sort of benefit. Comcast does it when they have their annual 20% rate hike.
Example:
Dear Comcast Customer, you can now pick from an exciting new cable package with more home shopping channels plus the Hallmark channel! Try not to notice that it's $10 more expensive than you are used to paying.
Electronic equipment usually fails in the first few days of use or else much later when it's lifetime is over. The extended warranty basically covers the period in between when the equiment is not expected to fail, therefore it's a waste of money (besides most people forgetting the receipt, not caring to use it, etc.).
Don't act shocked by Best Buy's policies. They've deliberately made an effort to make their pricing confusing in order to cull an extra few dollars out of the "unwashed masses" that come through their doors. You are exactly right that they (BB) are attempting to rid themselves of the smart consumers. Their policy seems to be more about differential pricing and impulse purchases than about offering a fair deal to everyone. That's just the way they operate, they've picked their target/strategy and they'll try to milk it for everything they can take. Get over it, spread the word, and shop somewhere else! I'm not saying that you (writer) have any problem with it, I've just seen some of the other "OUTRAGED" responses and feel they're misguided.
We all know that rebates will most likely NOT get sent in, extra money for them... Most people will buy the service policy AND throw the unit away when it breaks 6mos. later. Don't fall for these stunts... That's the best way to transmit the message to the Best Buy management. Punish them on the bottom line. That's all they've thought of, so it must be important to them. Show them that you are watching too. Say "NO" to the service plan, no matter how many times they ask, then walk out without purchasing anything when they try again (for the 4th time).
Secondly, there must be a supplier SOMEWHERE that treats the customer like they're smart and offers a fair deal without the tricks. Seems like that merchant should be looked to as the "place where cool & tech. savy people" shop. That would help boost their sales as almost EVERYONE would want to be flattered by being thought of as "hip" and "tech. savy" just for shopping there. You get the idea, it spirals up... Help those places to succeed!
Changing this works a little like the election strategy, when you get another customer to switch, you actually hurt Best Buy TWICE! Once when they lose the customer, and again when they vote with their dollars for the competition, making them relativly weaker in the marketspace.
Anyone reading this, start the change by putting down some places where you've felt like you got an AWESOME deal without any tricks, from a sales guy that you trusted and who didn't try to sell you with a bunch of technobabble (that you know is false). The list of Cool places to shop starts here --> (you reply)
For four years ending in early 2000, I owned a computer store.
The name of the store was "Computers Cheap!" which was a great draw for audience. We were the only guys in town who'd sell a used computer with warrantee.
But, with a name like "Computers Cheap!" you can be sure that we got plenty of people we called "bug people". Named after the nerdy entymologists on "Silence of the Lambs", they were people who had lots of time, and very little money. They were VERY good at wasting time and demanding refunds on used, "AS-IS" hardware that turned out not to work.
We built our own customer-filter - the $1 box. A box set in the corner, with a bright orange sign that said something like: "Wow! $1.00, no warrantee". It was filled with MFM hard drives, ancient motherboards, ISA video cards (when AGP had long since come out) and stuff that was generally worthless.
It was out of the way enough that you had to get down on your knees to get to it. It was also nearly 100% effective at identifying the "bug people".
It was incredible... over months and years we found that it was simply never wrong.
If you were caught kneeling in front of that box, you were immediately put on my "ignore" list. I'd be nice, but wouldn't give anything but a monosyllabic response from anyone.
On a side note, that $1 box came in real handy selling OEM copies of Windows legally. See, the contract requires that it be sold with a hard drive or motherboard. No mention of new/used, nor was there any requirement for a warrantee. So, we sold lots of copies of Windows with a used motherboard for $1....
I have no problem with your religion until you decide it's reason to deprive others of the truth.
The main point of any discussion is that it's your money. If you don't like their practices, vote with your money and go somewhere else.
That said, something similar was posted on Fark a couple of hours ago, so I've already read it (given, at work.) Looks like it was a different article on the same topic.
From what I can tell, they're pissed off at people buying items, getting the rebates, then returning the items, and more. Basically, they're mad that people are turning a profit on stuff bought from a Best Buy store.
I've heard complaints and gripes about Best Buy all over. However, you get horror stories from every store, regardless of big name or how crappy it is.
Perhaps I'm biased, but I've never had a bad experience at a Best Buy. The one near where I live has gotten good recommendations from people, while the one near my college tries to skate around the extended warenties at all costs, among other things. But that's what I've heard from others, never experienced myself.
I worked at a Best Buy (the one near my home) for about three months (occasional/seasonal, in Computers.) I felt I was lucky in the fact the people I worked with actually knew a good amount about Computers, whereas other places have had general sales people. The atmosphere I worked in was nice one, everyone was helpful, and I can't remember having a bad day (not even Black Friday, but I was just a gopher then.)
Was I told to push the replacement plans/extended warrantees as often as possible? Try and get people to buy accessories? Try and sell services with computers? Yes on all accounts. But you know what, it's a business, they turn a profit with that, and they need the profit to counter the low profit they make off, say, video game consoles.
If you have that much of a beef with Best Buy, stop whining and just got shop NewEgg. I'll be browsing around Best Buy, using the sales and rebates as I like, and still getting a good experience. If I ever get a bad experience from a Best Buy, I'll just stop going to that one, but not the entire chain.
What Best Buy and other corporations haven't figured out is that we, the buying public, don't have any sympathy for them. They've set the rules, and we will take them for everything we can get.
It would be different if it was a single owner. When I buy from a family-owned business down the street, I'm not going to cheat him; I will even pay more than the going rate, because I like the person and I like how the business is run. But when I buy from a corporation, the gloves are off. If they offer a half-price deal and forget to specify a limit -- fill the shopping cart! About 5 years ago, I figured out that they are trying to TAKE EVERY PENNY THEY CAN GET FROM ME, so I don't feel the slightest pang of conscience when doing the same back.
I'm not talking about stealing. I'm only saying that, when dealing with Circuit City or Best Buy or Dell or WalMart or Safeway or ToysRUs or Home Depot or anyone else, the megastores have lost all pretense of actually caring about their customers. It isn't even slightly dishonest to gouge them if they let you do it -- because they're gouging you with every means at their disposal. Try it -- you'll find you enjoy the challenge of sticking it to them!
(And yes, I'm sure I'm the devil incarnate for some stores I shop in.)
It's quite a bit more devious than that. Low price pledges are signals to other competitors that you are ready to end a price war, or enforce a cartel decison. If you match low prices you can find out that one of your cartel partners is breaking their half of the bargain, and you didn't have to spend anything on cartel enforcement (your customers did it for you). That said, if you don't already have a cheap DVD player, a little birdy told me that they would have the cheapest ones on black friday.
Best Buy's CEO (or one of the chiefs) is a firm believer that one of the best ways to boost profitability is to reduce the customers that don't make you any money and provide excellent service to those who make you tons. It's a bit like the difference between a Nordstrom's and Wal-Mart (grew up in the NW so Nordy's was the only high end retailer for a long time). One has free coffee, and salesfolk who kiss your butt. The other is doing volume business. The former makes up the services they offer with a markup, the latter makes a smaller margin on each sale, but has much, much lower overhead so they each net about the same amount on each dollar spent. Best Buy's goal is to become more like Nordstrom's but without pricing themselves out of the latter market. This is a very tall order, and we won't know if they succeeded for about a decade.
If it wasn't over in the Ars article, the WSJ (free today) has an excellent article about the whole topic. It's available here.
Degaussing scares the bad magnetism out of the monitor and fills it with good karma.
Why have such a pledge if you don't intend to honor it? Because it allows you to rig the game so that you, in effect, collude with your competitors and all the players on the selling side can make more money!
It's all economics. Game theory, to be precise.
In a game where price is the only determining factor between two goods, and you have at least one competitor, you are forced to sell your good at rock-bottom prices, or they'll go to another store. Thus, the Nash equilibrium of this game is that you all have to sell the item for no profit (assuming you all get it for the same price--otherwise, you just undercut the next lowest bid by one cent or the least you can & steal all their customers).
Now then, when you introduce this pledge, it turns out that all the people selling the product can, in effect, collude and sell it for a higher price! Sadly, I forget all the details of how it works out in recalculating the Nash equilibrium, and my game theory textbook is probably propping something up just now (sorry, I took that class quite a while ago now--the textbook on it is nowhere to be found). However, I can tell you for sure that this was one of their examples on how "hyper-competetive" seeming strategies can actually be anti-competetive in effect.
The good news? They're not the only ones who can change the rules, as we saw from some of the ways people got back at them. In fact, the article mentioned one person doing this to buy things at a loss from them just because they wanted to hurt the store (this in the Wall Street Journal article I saw in a comment here).
It's funny, too, because one of the other quotes was from them worrying that culturally, they might be seen as consumer-hostile. A worry it would seem is well-founded, given how many people seem to hate that store.
Is this representative of a trend away from PDAs, perhaps as a result of more-capable cell phones? Or has Best Buy just decided there isn't enough money to be made in this market?
I left without buying anything. I used to go to Best Buy because, in a pinch, I could find just about anything I needed. If this is part of a trend away from that "we have everything" approach I'm willing to bet that they're going to lose a lot of traffic in their stores.
If all they're interested in is selling $10,000 home theaters I think you're going to see a lot of Best Buys closing down within a few years. Sure, there's a lot of margin on those big-tickets but the volume isn't there to support stores of the size that Best Buy runs.
I work services too (computer services) and my motto is:
"If the customer was always right, he/she wouldn't need me."
I definitely tell my customers when I think that they are wrong about something, respectfully of course. Customers pay *me* to be right. Yes, my customer base is growing largely on the basis of customer referrals.
But Best Buy is doing something different and extremely counterproductive. The customer might not always be right about the technology, or other things where they pay an expert, but the customer is *always* the expert on the customer's needs. Best Buy is second-guessing the customer's intentions and integrity. 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!
LedgerSMB: Open source Accounting/ERP
I cannot detail them all, but once I waited 20 minutes for someone to show me a $2000 HDTV. Sure, it wasn't the most expensive unit, but something like that had to have a margin. It was not on sale. After I had been forgotten ,standing there in front of the unit I just wanted turned on, I walked out. Nobody notice. I went a mile down the road, and got it for $200 less from Circuit City (were it just happened to be on sale).
One time I went in to buy a 23" $2000 LCD monitor. The salesmonkey didn't have time to show it to me, but after 10 minutes a department manager came over. When I ask her to show it to me in it's 1600x1200 Native Resolution, she said "we can't do that".
Me: You Can't Do that?
Her: No.
Me: Okay, thanks. (I proceeded out the door)
I purchased the unit an hour later from Comp USA at full retail price.
Another time I went in to get a 1Gb SD card. The salesmonkey told me that they "didn't carry those kinds of cards, but we have flash memory". When she stepped 3 feet to the left, I found the SD cards right behind her. They didn't have 1GB though. I got it at Fry's an hour later. Full retail price.
I went in for a hard drive and some other accessories. It took the salesmonkey 45 minutes (no, I am not kidding) to find the key to the cage that the hard drive was in.
I bought that mechandise, but that is the last purchase I made at Best Buy.
Now, the folks at the local Circuit City know me by name. I buy decent-margin stuff every month.
I don't return things, and I don't buy rebate scams.
I'm sure Best Buy has no idea that i'm gone, but I personally have no idea how they stay in business. I couldn't get them to take my money on the largest ticket items!?!
Granted, I don't dress like a Barry or Buzz or whatever. I'll go in sweats to buy a laptop. I don't care what the salesmonkey's think of me (should I?). Do they get extra margin if you buy it while wearing a tie? I just want to get what I came for and leave. I can't do that at Best Buy.
For the record, the Best Buys I am speaking of are in Atwater Villiage and West Hollywood in LA.
Maybe it's different elsewhere, or maybe I just smell really bad (I bathe daily, but maybe they prefer cologne).
All of the salesmonkeys seem utterly clueless and disinterested, and seem to detest the fact that they work in Best Buy. As a matter of fact, they seem to detest the fact that I exist on the planet. The most rudimentary question is met with a blank stare or an utterly ridiculous incorrect answer (yeah, sometimes I ask when I already know because I like to know if the salemonkey is shooting me straight).
Thank goodness for the competitive market.
Absolutely no way they'd let me exchange an unopened video recorder to buy a more expensive one.
So the clerk said. Walking up to any manager, however, quickly reveals that common sense prevails.
Why are there only 19 people folding@home for slashdot?
Two things.
First: anyone who's read Malcolm Gladwell's _Tipping Point_ is familiar with what he refers to as human networking hubs. These people process and relay information to their friends and family and are often responsible for purchasing decisions not only for themselves but upwards 10-20 families.
I would venture to say that most of the people BB is actively trying to alienate are those type of people. Yes, those people will go to great lengths to manipulate rebates and pricematches and loss leaders to walk away from the store having spent as little money as possible. But these human deal hubs don't just pass on information about what BB would consider rip-off deals, they also pass on information about other products in the store.
I think what BB is really experiencing is what Wired covered in their last issue: brands mean piss in the information age. How much are these human hubs, these financial "tipping points" financially responsible for is hard to gauge, but I imagine BB will soon find out.
Secondly, what BB is experiencing is merely karmic retribution. What are rebates but a similar way to manipulate customers into paying more? It is boldly advertising one price and requiring a substantial amount of work to obtain. That rebates have pretty much maintained legality is beyond me. BB could stop offering rebates. They could stop pricematching. They could simply offer a product at a fair price and that be the end of it. But they don't, because these systems inherently take advantage of the consumer. Wal-mart, for all their sprawling corporate evil, are rarely on the deals sites because the price they advertise is the price you pay. So what's up BB's ass?
Well, the internet has empowered individuals to turn the tables on corporations like BB and take advantage of these manipulative systems on wide enough scale that it obviously causes BB execs to lose sleep and break par on the golf course.
I am a FWer, and I have walked out of BB with some pretty good deals. But I've used BB to buy dvds on opening day, I've bought several hundreds of dollars worth of electronics without finnegaling, and I've refrerred people to BB many times over. In fact, I planned to go buy Halo 2 from them tomorrow. Now, I'll be going somewhere else. I'll be visiting BB again, but when I do it will cost BB, and it will be paid for with untrackable cash.
Way to go, Brad. Enjoy your golf.
I decided to post on this thread instead of moderate...I actually had a good experience with buying a computer from Best Buy
Since Laptops can be hit and miss with Linux compatibility, I actually got the manager at Best Buy to write me a guarantee that if Linux would not install correctly (and simply) I could return the laptop with no restocking fee.
What's funny though...is the tech people there didn't think Linux would work on the laptop because all of the drivers on it were for Windows. I had to remind them that the drivers would be erased and replaced with Linux drivers. It also killed their plan to sell me anti-virus software, MS Office, and other extras.
Mod points are pointless when you browse at -1.
You hit the nail right on the head. I picked up on this a while ago and love it!
This is how it started for me:
Safeway ran a sale a while back on whole chickens. Now I have a big family, so this is worth doing because you get a lot from one chicken. Went to the store and literally filled a shopping cart full of them. Nothing posted anywhere said anything about limits. When I got to the checkout they said that was too many. (They had a ton of them and only a 2 day sale.) They had lots of new items in the store that day, along with the usual food demo people showing off expensive items.
Clearly they were thinking most people would grab a couple chickens along with a number of other items to balance out the sale. Clearly they were wrong. I've got a big freezer. BTW, if you have a family, this is probably one of the very best investments you can make. The food savings made possible pay for it in just a few months. By the time you don't need it anymore, you will literally save thousands.
I asked how many was too many and the checker actually said they flag high percentage savings. Anything over about 30 percent savings needed to have an override by the manager, unless the dollar amount of the total purchase was less than about $100.00 or so, in which case they could "just let it go through". As if that's a favor to me! Anyway, I found out they also flag specific savings, meat being one of them. My cart was only meat and the chicken was about 60 percent discounted. Total red flag, no doubt about it.
Manager came over and said their policy was about 10 items at that discount rate. (After looking at what I wanted to purchase) I needed to go put the rest back and only buy 10. When I asked them to show me where they had that published, they said it was in their corporate operations manual and that it was not for consumers (read cash cows) to see. When I asked why they just did not specify the limit, he told me that depends on inventory at hand. WTF?!? Obviously they had plenty of chicken, so something else was at work here; namely, I was getting too good of a deal. Time to just get this thing done and go home.
I told them I was going to have to make lots of small purchases then. They got petty and said I would have to go through the line for each bundle of chicken. Busy day, pretty long lines, with mine getting pretty long in particular. The lady behind was pissed! (She did have two chickens that I could see along with a couple hundered dollars in non-sale items.)
Lined up the kids, handed them some cash, and began to pile all the chicken into little 10 unit piles. Might as well play ball right?
The look on the managers face was priceless! He actually said it was unfair to put him in a position to have to tell the kids no! I said simply, "then I suggest you don't."
After about 10 seconds, I heard a murmured "fuck it", followed by a hasty conversation with the checker. Soon we were on our way with the chicken, all in one transaction. I have a receipt with a 60 percent savings totalling over $100.00. The computer would not allow his override, another person had to come over and use theirs.
That happened right after they started their club card thing. Since then, I have been through the same deal many times with no regrets. We actually have two cards. Whenever I use that card, it gets flagged all the time, but the other one doesn't. I just know there it's stamped "non-preferred customer". The name on that card does not get any offers in the mail either.
Another pet peeve: Stores that fuck with the per-unit pricing to make more expensive items harder to distinguish. They will use some odd unit to make the mental math difficult combined with "sales" on the expensive ones that actually still cost more!
Sorry for the rant, but I'm with you all the way. All things being equal, they are quite happy to take your money. Seems fair enough to grab some of theirs as well.
Blogging because I can...
Instead, I went to another shop, asked lots of questions which got answered and then later went home, and told my dad that the computer could do all the things he needed and the shop to buy it from.
I must be one of those 20% of devils. Best Buy pissed me off so bad when I was buying my mom a $500 e-Machine computer that I go out of my way NOT to shop there. It took me 45 minutes to get out of there. All I wanted to do was take a computer off the shelf and check out, but it was much more complicated than that. The saleslady kept pushing the extended warranty, software packages, and various services. They wanted to open up the computer in their service department to check out it because "e-Machines have a high rate of returns." Well if they're so bad why are you selling them? She had no answer for that.
Then more pleas for the extended warranty, software, and other crap. When I refused the extended warranty the second time I actually had to talk to her supervisor to let him hear for himself that I really didn't want it. The saleslady stressed that they aren't on commission, but I found later their managers ARE.
Finally (with escort of the sales lady) I was allowed to check out. If it wasn't for the price and the fact my mom needed the computer, I would have walked off. The good news is the cheapo e-Machine is still happily running years later.