How Office Depot Pushes Service Plans On Customers

Harry writes "I was amused, appalled, and angry — yes, all three — when I spotted signs above every register at my local Office Depot with handy scripts for clerks to use in 'recommending' that customers buy extra-cost, extremely profitable protection plans. And now Laptop Magazine has posted an eye-opening investigative report that charges local Office Depot stores with instructing staffers to lie and tell people who want to buy laptops without service plans that they're out of stock." Update: 03/13 00:53 GMT by T : An employee with Office Depot, somewhere in the southeastern US, wrote to respond to this story as a employee of the company, but in his off time and not in any official capacity: "I will only say that what is described in your article and the Laptop Mag article is not something that occurs across the entire company as sanctioned or ordered by the Corporate Higher Ups and is certainly nothing I have experienced as a 10-year employee of the company, we want sales. Yes, we want add-ons, but we will take the sales regardless."

Comments

The More You Read the Uglier It Gets

[eldavojohn]

I've seen these sheets and the further down you read the uglier it gets:

... if the customer somehow still refuses to purchase a warranty plan and can see the SKU on display, assess whether or not you could outrun the customer:

• If YES, grab the company knife from underneath the counter and ask the customer to think of the extended warranty as "protection money."
• If NO and you haven't already seen the victim ... er ... customer's credit card, grab the company camera under the counter and shoot photos as they leave the store. Be sure to get their license plate numbers clearly photographed and submit all photos in a dossier clearly marked "OPEN SEASON" to the Scientology division of Office Depot.

Remember, you're helping them by saving them the loss N years from now when it breaks and they didn't buy an N + 1 year warranty.

Re:The More You Read the Uglier It Gets

[CokeBear]

New great lie of history: "I'm from (wall street/mortgage broker/bank/investment firm) and I'm here to help."

Re:The More You Read the Uglier It Gets

[Fred_A]

Circuit City is bankrupt. Apparently this tactic didn't actually keep them competitive.

Obviously they didn't lie enough.

Re:The More You Read the Uglier It Gets

[cayenne8]

"Kind of like the 4th Greatest Lie of History: "Hi. I'm from the Government. I"m here to help."

I know the first two:

The check is in your mouth...

and

I won't cum in your mailbox...

Better Question

[moniker127]

Why would you buy a computer at office depot?

Re:Better Question

[Narnie]

Why would you buy a computer at office depot?

Because you need something with enough mass to make it through the store window when you plan on returning it?

Because you don't feel satisfied with a computer purchase unless you know you've been ripped off?

Because Office Depot is the only place that will extend you credit because you put a months worth of hookers and blow on your creditcard?

Re:Better Question

[IANAAC]

Why would you buy a computer at office depot?

Not so long ago you could have said the same thing about Best Buy - why would you buy a computer from them?

If you can find a better deal at Office Depot, why not?

Re:Better Question

[Icarus1919]

Thank god, someone with some information I can use. Where is it, again, that I can put blow on my credit card?

Re:Better Question

[schmiddy]

Where is it, again, that I can put blow on my credit card?

Glad I could help. On a serious note, if you're the sharp type and good at reading fine print, you can occasionally make money with "credit card arbitrage" by taking advantage of 0% APR balance transfer options. Not for the faint of heart, of course. Or you can take advantage of the US Mint's offers to sell dollar coins at face value with free shipping to skim credit card rewards points.

Re:Better Question

[fractoid]

Anywhere you want, but I suggest a discreet location such as your lounge room or kitchen.

Oh... OH. You meant BUY it. Nevermind.

Re:Better Question

[IANAAC]

Buy from a national chain, and the money flows outward, probably never to return to your region/city/neighborhood. For every $100 spent at a national book chain, only an infinitesimal amount remains locally (something like $10 or so). Buy from a local book store, and at least $45 remains in your neighborhood. Which means more employment, etc., etc. Dig????

Great! Point me to a local, non-national chain store to buy a netbook or MID (or laptop, for that matter) and I'm totally there (oh, and I should add at an attractive price, since that's usually what takes people to national chains).

Look, electronics and books are two very different industries and you just can't compare them. Books can be and are sometimes published and produced locally. I don't know of any local, US-based place that produces the electronics I would use. Dig?

Re:Better Question

[bretticus]

250MB hard disk

In this case, I think I'm going to have to agree with the OP.

Company or store policy?

[Ethanol-fueled]

Heh, that sounds about right.

I worked for OfficeMax a few years ago. Everybody who worked there received commissions for selling those overpriced plans to customers.

I'm wondering if the examples discussed in TFA are a companywide policy a la Best Buy with their seperate pricing for internet and intranet, or the brainchild of some greedy store manager. When I worked as a film-developer for a major drugstore chain, the store manager approached me about finding a way to cheat customers using standard processing for customers who turned in their film with premium envelopes(which means that customers who wanted offsite "premium" processing would instead have their stuff done in-house, saving us tons of cash and leaving us hoping that the customer wouldn't notice the lack of the extra features they wanted ^_^).

My biggest mistake in that job was mentioning the word "ethics" to my manager. I was never promoted ^_^

Re:Company or store policy?

[Aladrin]

Office Depot does not pay commissions. Instead, they just threaten your job if you don't sell enough. Since the employees are easy replaceable, even at near-minimum-wage, they don't have to care.

Yes, I used to work there as a 'customer service representative' (or some stupid title) and I was told 'never lie', etc etc... And then told that if I didn't sell enough plans there would be problems.

I refused to lie and refused to even -try- to sell the plans to people who didn't want them. Most of the time, I didn't even mention them. The only way I survived was that I was the -only- employee with any actual computer knowledge. I could actually fix computers where others couldn't even name the parts if they weren't labeled. (Okay, there were a couple that could install RAM, if they -had- to.)

They don't just push those plans, though. They also push overpriced ink, paper, cords, power strips... Anything and everything to add money to that sale.

Obviously, the employees hate that shit as much as the customers do. I'm not surprised that they've resorted to lying directly from management to the customer to try to sell the extras.

The one article claims a really odd commission system... While it wasn't in effect when I was there, it was the kind of bullshit they'd pull, so it might be true. They're really, really cheap though, so I seriously doubt it's true.

Re:Company or store policy?

[Ethanol-fueled]

Obviously, the employees hate that shit as much as the customers do.

Yes! Laymen, please keep that in mind the next time you get that crap from one of us working that shit job. Also know that those bullshit policies are often enforced by secret shoppers. Secret shoppers are people who work for agencies who are paid by the company to monitor employee behavioral compliance.

OfficeMax didn't have them then, but the drugstore chain did. In that case, the random weekly visits measured for all of the employees working in the store(YMMV):

Did the employee greet you with a smile?
Did the employee ask you if you found everything you wanted?
Did the employee offer to take(or call somebody to take) you to the item?
Did the employee offer a friendly parting comment?

I never found out for sure, but I've heard that store managers receive bonuses for keeping payrolls low. My store manager was paid 63K a year while the understaffed underlings often work for minimum wages. Keep that in mind the next time you visit a drug or grocery store with 30 people in line being served by only 2 cashiers.

Re:Company or store policy?

[Yeef]

I used to work at the local Best Buy and, like most big retailers, they had us pushing the service plans and other stupid add-ons (magazine subscriptions, credit cards, etc). While they never told us to lie, they'd often tell us to omit mentioning any potential negatives unless the customer specifically asked about it.

Best Buy employees don't work on commission, true, but of course they gave more hours to the people that managed to get more customers to sign up for service plans. There's nothing wrong with that. Now, most of my co-workers were honest people; it wasn't uncommon to see some of them give the customers faulty information, but it was usually out of ignorance rather than trying to purposely be deceptive.

There was a handful of people, though, that would tell outright falsehoods to customers to get them to get a service plan or what have you. There was one employee in particular that would sign people up for the magazine subscriptions without even asking then (the 'free' trial that they charge you for after the 8th week if you don't cancel).

Of course, since I worked Customer Service I was the one who had to deal with all of the angry customers. Easily the most stressful job I've ever had. On the one side I had customers venting their frustrations at me. Then, with the way Best Buy's hierarchy is set up (there were about 12 managers, all with the same level of authority and conflicting sets of instructions) it was chaos trying to figure out exactly what they expected from me. So, I simply stuck to the official store policy and, of course, I got 'spoken to' (but not written up, because they really wouldn't have a leg to stand on) for accepting too many returns even though I was following company policy to the letter. After putting up with that shit for two years, I'd finally had enough and quit.

I suppose I'm going off on a tangent here, so let me get back on topic. I think that, with the exception of a few people, most retail employees loathe using lying to people, even if only through omission. Unfortunately, the way the system is setup, there isn't really much of a choice. I was fortunate enough that I could afford to quit a job that I hated (and that was back when the economy was still relatively good). But not everyone has that luxury. If you have a family to support or are a student paying your own tuition (as a lot of my co-workers were) it's not really an option. When I was working at Best Buy, the only people there that seemed to genuinely enjoy their job, other than the managers, were the people working in the warehouse (away from the customers). Most everyone else just sort of begrudgingly accepted that things could be worse and did their best to bear it.

Re:Company or store policy?

[syousef]

So if the owners are paying the managers ridiculously large wages while the people actually doing the "real work" are getting cheated then the entrepreneur will not be in business very long.

Is that why CEOs are paid so many million whether or not the company is failing? Everything up until that paragraph was BS, but that really clinched it.

Here in Australia we have a scandal going on where an iconic Australian clothing company called Pacific Brands is firing thousands of local staff to move their operations offshore. Anyone that quits early loses their redundancy payouts. Meanwhile the CEO doubled her salary. This is possible because company executives have all the power and are able to decide where to make cuts first. Meanwhile they also pat each other on the back and increase their own wages if company performance improves as a result. Their money doesn't come from the money fairy. The employees and the share holders all lose out as the company is sold out from under them.

Appalled?

[phantomfive]

Wow, if you get appalled over scripts for cashiers, wait until you find out about telemarketers, what THEY have. I fear the day you learn about politician's speech writers. Oh, and did you know? Those bills that get passed through congress, often the congresspeople DON'T EVEN READ THEM.

OK I'll stop now to keep your rage meter from going overboard.

(This message brought to you from the 'please channel your anger towards things that actually matter dept').

Man, I must be feeling bitter today.

Depot dumbness

[pilgrim23]

I bought a keyboard yesterday. I was asked if I wanted a warranty. I said "On a keyboard?" with a sardonic sound. It went right over her head. Then she put a tape over the edge of the box "Whats that?" I asked "our return policy" she said. "So if I break the tape I cannot return it? You do realize I need to open the box." " I'm sorry sir, that is the policy" she smartly replied. I left with my wallet, but not wits intact...

Best Buy tried this as well to "fight" piracy.

[Doug52392]

About a year ago, I walked into a local Best Buy, and was shocked, appalled, angry, but not surprised, to see anti-filesharing propaganda set up throughout the store.

I counted over 25 fliers hanging on walls, telling people "DOWNLOADING IS A CRIME!", and other propaganda. The most elaborate display they set up was in the MP3 Players section of the store. They mounted two flashing strobe lights on top of a display, designed to look like a police car's flashing lights. They then placed a large sign stating that "DOWNLOADING IS A CRIME. DON'T GO TO JAIL, DON'T DOWNLOAD".

So I asked one of the employees about the signs. They said it was an order by their upper management (as in, from their corporate offices). I then asked if they believed that downloading music is a criminal offense that can result in arrest, as they clearly try to say. They did not know. Some of them said "Yes", while others didn't answer the question.

Needless to say, I guess people complained, because the signs were gone after a while...

Re:Best Buy tried this as well to "fight" piracy.

[MrEricSir]

"Sir, I saw you put those CDs in your pants. Are you stealing them?"
"Yes, well I wasn't going to download these, but then I saw your sign..."

Re:Best Buy tried this as well to "fight" piracy.

[MrEricSir]

-wasn't
+was

Guess I should have bought an extended warranty on my original post.

The Script..

[$1uck]

"This _____ is eligible for our replacement plan. I recommend it because if the product fails after the manufacturer's warranty, it will be replaced with an Office Depot Merchandise card for the full price you are paying today."
If this shocks, amazes, or angers you. Get a fucking life. How is this news at all? If they want to lose a sale b/c they're not selling a protection plan, well I would think they are just shooting themselves in the foot.

Yabbut...

[cptdondo]

Wait till they get a patent on this method!

I bought mine... at Circuit City

[PCM2]

Believe it or not, I bought my current PC at Circuit City. I know, I know. But at the time, Circuit City had the same model HP Pavilion for as little or less than anyone online, with the additional advantage that I could jump on the bus and go buy one today, rather than having to wait around for UPS to deliver it. A week later, Amazon.com dropped the price by $50, so I went back to Circuit City and said, "Hey! I you guys ripped me off!" The nice kid at the cash register promptly credited $50 to my card. Total time without a working computer: 18 hours. Total money lost due to not shopping online: $0.

Am I sorry they're out of business?

I dunno. Not really.

Here is what I do

[bogaboga]

When I am to buy anything from stores like Office Depot, and happen to be coaxed into these service plans, I tell them:

"Look, this is a gift. If I must purchase a service plan before walking out with this product, then I will leave it. Now, can I have this product without a service plan or not?"

This script has worked remarkably well at all times. I have never been disappointed.

Re:Here is what I do

[Anonymous Coward]

Or you could try my favorite.

Oh its out of stock? Damn thought you guys had a good service plan too. Guess I will go to insert other store here.

Magically in stock again? At register with item in hand. Service plan? What service plan? I didnt say I wanted one please take it off.

Bait and switch works BOTH ways.

I did the same thing at Office Max

[slummy]

When I was 17 I worked for Office Max.

The incentives that they gave the salesperson who sold the extended "warranty" on any electronic/furniture item far outweighed any moral obligation for me. I would push a $5.99 1-year replacement warranty on just about anything I could, selling someone a $29.99 inkjet printer with a warranty gave me an extra $12 bucks in my check. Some weeks my check gross amount just about doubled from the volume of extended replacement plans I sold.
I don't blame them.

A former employee

[UnrealisticWhample]

A few years ago I worked at Office Depot for about a month while I was looking for other work. I was hired on as a stocker, though they'd occasionally have me cover the computer department when we were short staffed. At our store, management set a quota for each employee for how many service plans we were supposed to sell each week with a required Saturday morning training session for any employee who did not reach their quota where we would do crap like train on these scripts and brainstorm incentive plans on how to motivate us to sell more.

I went to one of these stupid meetings and all I could say for myself is that since I worked as a stocker in office supplies, I didn't even sell anything that I could in theory have pushed a service plan on, even if I didn't think they were crap. They responded that I was mistaken because batteries were in my department and they qualified. WTF? How the hell are you supposed to sell a service plan on a pack of AA batteries? I quit before the next Saturday as I'd found another job, though I probably would have given them notice if it weren't for the crappy work environment.

Re:A former employee

[Akili]

About a decade ago I worked for Staples, in their business center.

I witnessed, firsthand, a 'model' employee taking a printer out of a customer's cart when the customer revealed that they weren't going to buy the money pit of an extended warranty plan! Subsequently telling that same customer that the entire wall of boxed printers was on hold for 'a school' was the icing on that particular cake.

Our store had the best rankings in the district because 'we' flat-out refused to let warranty-able items go out the door without a warranty being purchased. While the official store policy was never to use those sorts of tactics, there was a sheet that was distributed to each store in a given district, posted prominently in the break room, ranking each store by how well they did selling those warranty plans, and the best store got awards and the like. Kind of a we don't condone this behavior, but if it gets results, we'll pretend not to notice arrangement, it seemed.

I got in some hot water for not pushing those warranties - I sold perhaps one a month, usually because the customer wanted it - but I had other good employee qualities that they apparently decided were worth keeping me for.

Anyway. I have no idea if they still do such a thing, but it's not a new idea.

I've got a better script.

[Locke2005]

"Nice little laptop you got here... shame if anything happened to it!"

Re:the slide shown

[vux984]

Not at all. The true reason the salesperson recommends the extended warranty is because they get commission. The reason given in the script is an unrelated fact, so by following the script the salesperson is lying.

No. By following the script the sales person is giving you a true reason why you might want to buy it. It doesn't happen to be the reason he wants to sell it to you, but what has that got to do with anything?

The true reason the store exists at all is to extract money from customers. So if I walk in an ask to buy a single pen, and an employee suggests buying the 3 pack for twice the price 'because you get 2 for the price of 1' he isn't lying to me. Its the truth, and perhaps even a good reason to buy the 3 pack.

The fact that he makes more money from the sale this way is the reason he suggested it, but that doesn't make the rest of the conversation a lie.

Office Despot

[tverbeek]

I've avoided buying anything at Office Despot since I walked into one years ago and they had a sign boasting that they test their employees for drugs. Even aside from the fact that I find that invasion of employees' privacy troublesome on principle, why would I - as a customer - care whether the guy ringing up my sale smokes a little weed once in a while, or even if the girl restocking the shelves does a line of coke every night? What kind of business brags about how worker-unfriendly an employer they are?

Re:Office Despot

[Daniel Dvorkin]

Given the choice would you really want to be standing next to warehouse racks holding palettes of merchandise built by some one who toked up before they came to work or some one who doesn't use.

This is a red herring. "Before they came to work," of course not, but then, I wouldn't want to be there next to someone who downed a six-pack before coming to work either. But if he got stoned the night before, or got drunk the night before, or both, or neither -- why should I care?

Re:Office Despot

[interkin3tic]

I suppose that's one way to think about it. Another is that since those drugs are illegal, they tend to be supplied by large drug-smuggling operations.

I run a mom-and-pop drug smuggling operation, you insensitive clod!

Lie?

[PPH]

instructing staffers to lie and tell people who want to buy laptops without service plans that they're out of stock.

I don't get how this would work. Generally, extended service plans are pushed at the end of the sales transaction, when you are standing at the cash register.* They might be good, but I've yet to meet a sales person that can convince me that the laptop I'm holding is out of stock** and must be a figment of my imagination.

*Any earlier and the issue of product reliability becomes an issue. "What! I need a service plan? Does this thing break down a lot?"

**Generally, when I walk in to a store to buy something, the first thing I do (before aking about all of the expensive accessories) is to see if they actually have one in stock. Yes? Well, bring it out and let me take a look at it. The continuation of the transaction is predecated upon them actually producting the item in person.

Office Depot CEO: "Worst CEO of 2008"

[Futurepower(R)]

Circuit City had a bad reputation. If you could buy something somewhere else, you would probably go there. Now it looks to me as though Office Depot is ODing on the same foolish management ideas.

It would be interesting if we could know two things: 1) Exactly how much Office Depot makes by selling overpriced "protection" plans. 2) How much it will cost Office Depot because of stories about the company being abusive on Reddit.com, Digg.com, and Slashdot.

That Digg link leads to a New York Times article about the Office Depot CEO. Quoting: "The worst chief executive of the year was Steve Odland of Office Depot, according to Glassdoor.com's reviewers. He had an 80 percent disapproval rating."

CEOs in the U.S. often make 475 times the pay of the average person. I suppose it doesn't matter to many CEOs if the company they are managing dies. The CEOs make millions as fast as possible, and when the company dies, they retire or do something else.

That isn't honest, I think it is psychologically self-destructive, but it seems to me that's the way things often are.

Warren Buffett warned about bank failures in 2003. It was certainly no secret; anyone with any interest in financial business knew about the problem. Bank executives knew that what they were doing would be the end of their companies. I suppose they were making so much money (sometimes $40 million per year) that they didn't feel it was necessary to care. It was understood, and often discussed even on TV, that the U.S. taxpayer would pay for any problems that were created; that is happening exactly the way it was planned.

Re:Office Depot CEO: "Worst CEO of 2008"

[Skapare]

You mean this?

1. Get job as CEO
2. Drive company into bankruptcy
3. Profit (retire rich on fat bonus)!

I can top that...

[TiggertheMad]

I worked at ChimpUSA in college (same shit, different company), and once of my co-workers with less than stellar morals managed to sell some lady a 1 year warranty on printer ink.

When the boss found out, he yelled at the guy, not for being a total slimeball, but because the woman could have probably come back and got free replacements for her 'defective' (re:empty) ink cartridges for the next year...

How does that work?

[interkin3tic]

While this is an annoying policy on paper, there are several ways I could see this actually playing out, and none of them really seem to work.

Scenario 1

Customer: "Hi, I want to buy this laptop"
Clerk: "You wanna buy an extended warranty?"
Customer: "No thanks"
Clerk: "We don't have any in stock"
Customer: "Uh... then yes I do?"
Clerk: "We just got some in right now!"
Customer: "Then I'll take one without the warranty."
Clerk: "Aw, what a shame, we just sold out."

Scenario 2

Clerk: "Hey, you seem interested in that there laptop, you want to buy one?"
Customer: "Sure."
Clerk: "Extended warranty?"
Customer: "No thanks"
Clerk: "Sorry, I just checked, we're out of stock"
Customer: "But... you didn't go anywhere, you didn't even act like you were looking in the stock room"
Clerk: "Uh... Telepathy!"

Scenario 3:

Customer: "I want this laptop."
Clerk: "You want extend waranty."
Customer: "No"
Clerk: "No computer in stock"
Customer: "Yes you do, this box right here, in my hand, I want to buy it."
Clerk: "Me ring up"
Customer: "Okay here"
(Customer hands computer to Clerk, Clerk smashes the computer with a primitive club)
Clerk: "No computer in stock."

Then again, I haven't worked in retail for a long time, maybe my "Lying to strangers" skills are rusty.