Best Buy Accused of Overcharging

An anonymous reader writes "Connecticut's Attorney General Richard Blumenthal has accused Best Buy of overcharging its customers. His accusation is that customers see one price on Best Buy's website, in stores salespeople would show them a different internal site from a kiosk. Best Buy denies the charges. 'Previously, the company confirmed that store employees have access to an internal Web site that looks nearly identical to the public BestBuy.com site, but the company's policy is always to offer customers the lowest quoted price unless it's specifically identified as a deal available only to online shoppers. Jerry Farrell Jr., Connecticut's consumer protection commissioner, said the lawsuit should be a warning to companies to be more transparent in their business practices.'"

Comments

Re:About damn time

[rob1980]

At least you actually found the memory you were looking for. Anytime I went there looking for memory that was being advertised, they were mysteriously sold out, but had several other models costing 10-20 bucks more I could choose from.

Repost?

[phalse phace]

Sort of a repost, no?

Re:subject

[llefler]

Charging a different price isn't the problem, they just have to tell their customers that the stores do not honor the web site prices. That is not what they did. They built a complete internal web site that looked identical to their other one. When a customer said "It was advertised at $xx on the web site", Best Buy employees would look it up on the internal web site, that might or might not match.

The accusation is that the internal website had higher prices, and when a customer quoted the external website, Best Buy employees would show them the internal site and say "no, this is the advertised price on the site". They're saying that the internal site was designed to intentionally mislead and overcharge customers.

Shocked? Why?

[tweak4]

Am I shocked? Yes. I'm absolutely stunned. Why? This has been standard practice in electronics stores for years. (Not that I condone it- I just figured the entire world knew about it by now). When I worked at CompUSA in the late 90s, we carried printer cables that sold for about $32 US. I know for a fact that the company cost on them was in the neighborhood of $2.25. Almost all electronics stores sell the big items at very, very thin margins and then try to make up for it by overpricing the living crap out of the accessories. So if you ever want to make a Best Buy employee (or manager more likely) cry, buy all of your major components when they're on sale, and make sure they know you're picking up your cables and accessories for pennies on eBay ;)

the value of best buy's service plan

[commodoresloat]

The service plan is actually worth it for certain expensive and frequently updated devices. I bought a third generation iPod there years ago for like $400. I spend $40 on the service plan. It died once and I took it in; they had stopped selling that model (maybe 20 gig? I don't recall) but had one at about that price point with a bigger hard drive. They couldn't fix it, so they gave me the newer model; I got an upgrade essentially for $40. Another year passed and I was having problems with this one - nothing major, but the software was messed up enough to be annoying. I took it in and explained the problem. They didn't even try to fix it; they just pulled a brand new top model 4th gen off the shelf and gave it to me. That was about a year or so ago; the ipod is still working fine but I am seriously thinking of plugging the firewire cord in the wrong way by accident and then taking it in for an upgrade again; at this point I ought to be able to get an 80 gig 5th gen ipod...

Re:the value of best buy's service plan

[AuMatar]

Most people actually don't upgrade their ipods that fast. But ignoring that (and the fact that purposely breaking an item to cash in on an insurance plan is fraud)- you're still losing money. Most poducts don't break. Service plans are priced so that chance_of_breaking*price_of_replacementprice_of_pl an. Given this, you will not save money buying service plans, unless you are either extremely unlucky or they miscalculate the chance of breaking.

The only time it makes sense to take on of the plans is if the cost of the item is so high that you can't afford to replace it if it does break, and you can't go without it. Anything else ends up being a bad financial gamble.

Re:the value of best buy's service plan

[CodeBuster]

Anything else ends up being a bad financial gamble.

In fact, it almost *always* is a bad financial gamble...take cell phone insurance plans for example (most people are probably familiar with those). The last time I purchased a cell phone w/plan I calculated, given the monthly insurance payment and the value of the phone, using the formulas for Expected Value and Present Value (using short term bank CD rates for interest), that the insurance companies figure that there is better than 90% chance that every person who purchases the insurance on their cell phone will end up using it before the insurance company receives payments in the amount of the original purchase price of the phone. In other words, if you believe that your chance of having a total loss on your phone is less than 90% certain (assuming that you don't plan to break it on purpose to collect, which would be fraudulent and is probably why the insurance companies chose this high rate, to cover the costs of the people that do this so that their insurance money wasn't 'wasted') before you have paid an amount equivalent to the phone then you should *not* purchase the insurance. It would be cheaper to simply buy a new phone at full (or probably reduced price, but I didn't even factor that into my calculation so how much *worse* of a deal would the insurance be if we accounted for depreciation of the phone? Probably push that probability over 100% which means that the insurance company wins no matter what happens) price on the off chance that you lose it or it breaks. I would imagine that most consumer product insurance, with the possible exception of really big ticket durable goods like cars, is scaled like this to account for all of the cheaters since most people who buy this type of insurance plan to collect at some point in the future.

Re:About damn time

[zerocool^]

Not that I give a damn about their business practices, but I used to be a sales associate at Best Buy, in the computer department.

You have to trust me when I say this: The people in the store have NOTHING to do with this. We never hid sales items.

Here's the real story. Every Friday or Saturday, we'd get the weekly ad which went live on Sunday. In my store, we got two trucks a week, Wednesday and Friday, after close of business. Sometimes they were 48', sometimes 53'. If we didn't have the ad by Friday night, we could usually tell which stick of ram would be on sale because we got a box of it, probably 20 units or more. As I recall, there were usually three brands - kingston, ValURam, and one other that I forget. Every week, one of the 256 MB sticks would be on sale, and usually a laptop stick as well (I worked there around 2000-2001). So, when we knew, we'd stock as much of it as possible to have it close on hand.

With no exceptions, on Sunday morning at open of business (11 am), the first people in the store would be headed straight for the computer department counter, to buy all the ram they could. Usually, it said something like "limit 2 per" on the ad, but when it didn't say that, boy was it not a fun day to hand out the ram. Anyway, by 6 pm - close of business - on Sunday, all the ram was gone. We of course still had the two other brands in the same size which were $20 more. But, by Tuesday, the customers were incensed about the lack of advertised items.

I cannot count the times I was accused by outraged, misinformed customers of bait-and-switch when I'd show them what we happened to have in stock, be it ram or computers. No, sir, I'm sorry that we don't have any more of the $350 E-Machine computer in stock. Perhaps when you see a computer deal that's insanely cheap, you shouldn't presume that you are the only person within 50 miles that will want to purchase it. Yes, sir, we did have them in stock. Yes, sir, we got a shipment of 30 of them last Friday, and we anticipate getting another 15 Wednesday, and probably some more this Friday. No sir, I can't hold one for you.

Whatever. Ask me anything you want, I worked there long enough to know how almost everything works. I'll reply truthfully.

~Wx