Slashdot Mirror
Big Box Store Reps Push Unnecessary Recovery Discs
Ed Albro, PC World writes "At PC World, we've got a story today on salespeople at Best Buy and Circuit City pushing consumers to pay the stores' technicians to create recovery discs for their new laptops. Recovery discs are important to have, of course, but the fact is that they're easy to make yourself. Or you can get them from the manufacturer of your PC, often for half of what Best Buy and Circuit City charge you. The salespeople often tell you that you can buy from the manufacturer — but they claim you'll pay twice as much as the stores charge."
I remember when it was commonplace to get a recovery disc along with your computer; now you have to pay (quite a bit) for software that's already on your system. What happened?
<sig> </sig>
I hope someone mods this up, especially since there are a lot of folks like me that have ACs auto-modded down.
You're right on the mark. Here's the thing. If you buy warranties on everything you buy that they're offered on, at some point, you will come out ahead on some particular item. A laptop, a refrigerator, a microwave oven, a television, an iPod... Something. And, as the parent post noted, good for you.
However, that thing that you came out ahead on has a nasty way of ingraining itself into your selective memory. You remember that thing that you came out ahead on, because wow, you saved hundreds of dollars. You tend to forget the thousands of dollars you lose $50 to $100 at a time by buying extended warranties that you never need or use.
It's simple psychology, and retail stores are taking advantage of it, along with people's lack of knowledge about computers and their tendency to react to fear, to make billions of dollars a year. Ask any financial expert or consumer advocate and they'll all say the same thing: The only time you should ever purchase a warranty is if you literally cannot function without whatever it is you're buying the warranty for.
Plus, that doesn't take into account the fact that most of the time, it's a lot harder to actually get companies to follow through on their warranties than the salespeople claim it will be. Keep in mind that when companies have to pay out warranties, that's taking money away from them that they had considered pure profit. It's very likely that they'll avoid fulfilling the terms based on some technicality. For example, did you keep all of the original packaging? Even the driver CD? My dad got burned on that one once. He tried to claim an extended warranty repair, and they wouldn't fulfill the warranty because he had thrown away a three-year-old driver disc.
Last, but not least, it may seem like a bargain to buy a $200 five-year extended warranty on a $2000 computer. But in five years, what will that computer really be worth? If you're lucky, maybe $100 on eBay. You can get a replacement cheaper than you can ship the durn thing.
Just don't do it. Take all money you would have spent on extended warranties and put it in a savings account. You'll earn interest on it, and in no time, you'll have enough money in the bank to replace anything like that that you would buy and you'll never need another warranty again.
You obviously are one yourself, for I clearly remember the page in my CP/M manual urging to and explaining how to actually duplicate the full system and utility disks from the originals as soon as possible, just in case. Going as far as suggesting to make more than one copy.
So, I look at the other stuff you're buying, to see if we're making any sort of profit on you at all. If you're loaded up with stuff that we actually make money on, I'd be happy to do you the favor. Otherwise, I'd be more than happy to sell that computer to someone we'll make a profit on instead.
Go ahead, threaten to take your business elsewhere. We'd much rather you buy the computer somewhere else, and cause a competitor to lose money. Raise hell with my manager if you want. He'll promise you that I'll be "dealt with" just to make you go away, and then he'll come over and say to me, "man, that guy was a total asshole." I can't even tell you how many times I saw that happen.
I've worked at Best Buy as well, for both the computer and Geek Squad departments. While it is true that Best Buy does not make much money off a computer sale alone, you forget that a non-sale of a computer is still lost revenue.
Pick a scenario:
1. Make an immediate sale, but with less profit.
2. Deny the sale because of the "measly" profit and have the computer sit there for a few more weeks.
From a business perspective, you've already lost money on wages, electricity, rent, products, etc. By having your product just sit there, you are doing nothing for the overall productivity of the company. Dell makes huge profits because they have a negative product-stocked/sales ratio. They actually sell the product before they have to store it in their warehouses, if at all.
Best Buy, from what I can remember from our store meetings, have a product shelf life of about 1-2 weeks before they have to replenish stock. The process goes something like this:
1. Buy products from manufacturers. (Lose money)
2. Keep products in warehouses.(Lose more money on rent/maintenance of warehouse)
3. Sit on store shelves, awaiting sale. (Lose more money on employees and other retail costs)
4. Finally selling the product to a customer. (Profit!)
It's understandable that you'd want to sell the computer bundle for as much money as possible, but there are times when that won't happen. Customers will simply come in for the computer itself and nothing else. At times when it's a huge sale and with limited quantities, I've seen employees say they're out of stock simply to stop the sale from happening. Ethics aside, I can see why a store would want to do that (though I don't agree with it). But when that computer will just be sitting there for weeks, what's the point in not selling it? You're just going to cost the company more money.