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Best Buy: 20% Of Customers Are Wrong

Posted by timothy on Mon Nov 08, 2004 07:57 PM
from the wrong-wrong-wrong dept.
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."
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story
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  • by LostCluster (625375) * on Monday November 08 2004, @07:58PM (#10761575) Homepage
    Best Buy recently changed the terms of their "Reward Zone" package to make it harder to earn certificates, and one specific tactic they are using is deducting the value of rebates from what they count towards earning a certificate. So, picking up a "Free after rebate" deal is now worthless according to their program.
    • by joeflies (529536) on Monday November 08 2004, @08:04PM (#10761629)
      I don't remember it word for word, but in essence, it said "Based on customer feedback, you'll now earn rewards for every $125 of purchases".

      I wonder to myself ... what customer gave feedback that they wanted to the program to be more difficult to earn rewards?

      • by gcaseye6677 (694805) on Monday November 08 2004, @08:42PM (#10761912)
        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.
      • by glimmernull (815949) on Monday November 08 2004, @09:16PM (#10762169)
        To better serve our customers feedback please select when you would like to earn rewards:

        1. $125
        2. $2500
        3. $5000
        4. $10000
  • by rednip (186217) <rednip@gma i l . com> on Monday November 08 2004, @07:59PM (#10761585) Journal
    I'd guess that I look like a Barry to them, but next time I walk into best buy, I'm wearing a name tag "Buzz", just so they don't get it wrong. When I was working in the service industry, I used to tell my trainees "The Customer isn't always right, but it's not my job to tell them that."
  • by ravenspear (756059) on Monday November 08 2004, @08:02PM (#10761607)
    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.
    • by rev0102 (701177) on Monday November 08 2004, @08:04PM (#10761623)
      Yeah, but I think they've made it clear they don't want your business anyway :)
    • Not upstanding? (Score:5, Insightful)

      by Mike Hawk (687615) on Monday November 08 2004, @08:09PM (#10761668) Journal
      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.
      • Re:Not upstanding? (Score:5, Insightful)

        by ravenspear (756059) on Monday November 08 2004, @08:20PM (#10761757)
        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.

        No I don't do that kind of stuff. I was referring more to the other parts.

        They load up on "loss leaders," severely discounted merchandise designed to boost store traffic, then flip the goods at a profit on eBay.

        That's not robbery. It's called commerce. Buy low, sell high. Nothing illegal or shady about it at all. Is Best Buy saying they don't want any of their customers to be able to sell any of the things they purchase?

        And then this:
        They slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.

        Why even have a lowest price pledge if you aren't going to honor it?

        Sorry but Best Buy is not the injured party here. They are simply bitching because selling to consumers who exercise some initiative makes it slightly less easy for them to earn maximum profit.
        • Re:Not upstanding? (Score:5, Insightful)

          by Hobadee (787558) <Eric AT Kincl DOT net> on Monday November 08 2004, @09:01PM (#10762069) Homepage Journal
          When I bought the WarCraftIII battle chest, I first looked online for pricing. I found a website that was selling it for $30. I went to Best Buy. They wouldn't give me a discount, so I went to CompUSA. CompUSA first said "We don't honor on-line ads.", but then the guy went and asked his manager, and I got it for $30! Moral of this story? I'm going to CompUSA from now on! If you're nice to your customers, they will come back, and in the end, you will turn a profit, because although they are buying discounted, they keep returning to you instead of someone else!
        • by Xenographic (557057) on Monday November 08 2004, @09:40PM (#10762318) Homepage Journal
          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.
          • Re:Not upstanding? (Score:5, Interesting)

            by nelsonal (549144) on Monday November 08 2004, @09:15PM (#10762159) Journal
            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. [wsj.com]
              • Re:Not upstanding? (Score:5, Insightful)

                by expro (597113) on Monday November 08 2004, @09:10PM (#10762130)

                I used an ad to get a price match at a retailer that I will not name. The competitor was local, and they DID have the item in stock. The salesdrone asked me "Well, why didn't you buy it there?" as if I were annoying him just by trying to spend my money there.

                So, why didn't you buy it there? Reward the retailer who was willing to discount without any prodding.

                Often, if you take advantage of price matching, the retailer then goes back to his supplier and puts pressure on the supplier to stop supplying the usually-smaller business that is undercutting him. This happens all the time.

                I believe there is an ethical problem with taking advantage of price matching. Just go buy it at the better price. If you doon't want to deal with the person making the lower price, pay the higher price. Don't punish the person competing and thus keeping prices low.

    • by Dr_Marvin_Monroe (550052) on Monday November 08 2004, @08:44PM (#10761932)
      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)
  • by cLive ;-) (132299) on Monday November 08 2004, @08:02PM (#10761608) Homepage Journal
    Currently, you can read it here [wsj.com].

    cLive ;-)

  • by Anonymous Coward on Monday November 08 2004, @08:04PM (#10761624)
    "They can wreak enormous economic havoc," says Mr. Anderson.

    I think this explains alot...

  • Shady (Score:5, Interesting)

    by MacFury (659201) <me&johnkramlich,com> on Monday November 08 2004, @08:04PM (#10761626) Homepage
    I understand the want to make money, the more the better...but their comes a time when you really can bilk your customers anymore than you already do, or they will go someplace else.

    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.

  • by LostCluster (625375) * on Monday November 08 2004, @08:04PM (#10761630) Homepage
    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.
  • by havaloc (50551) * on Monday November 08 2004, @08:05PM (#10761635) Homepage
    ...do we still hate Circuit City over the DIVX debacle, or can we forgive them now?
  • by macshune (628296) on Monday November 08 2004, @08:05PM (#10761641) Journal
    Just pay in cash. Then they can't track you and put your info into demographic databases. Those rebates are another matter, but for purchases, cash 'll do it.

    Oh, and when you carry that cash, be extra cool and put the money in an aluminum briefcase that's handcuffed to your wrist.
  • by Anonymous Coward on Monday November 08 2004, @08:06PM (#10761653)
    That article was pretty good, but you might want to think about getting our extended warranty plan for it. Everybody who reads that article gets it.

    Well, there was one guy here who didn't get it, I heard something happened with his ears after he read the article and he was left helpless and with some HUGE bills. The bills were bigger than just getting the warranty and even more than a new article would have cost.

    We were trained to recognize the people who would refuse extended warranties. They're like Barry's, but we call them Dingle Barry's since they're really like unwanted poop that clings to us. If you tell me one more time you're refusing the warranty, I'm going to get on my radio and "start combing out the 'barry's" so to speak.
  • by kjones692 (805101) <(moc.liamg) (ta) (rezinagrobyc.eht)> on Monday November 08 2004, @08:08PM (#10761665)
    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.
    • by Queer Boy (451309) <dragon.76NO@SPAMmac.com> on Monday November 08 2004, @08:36PM (#10761873)
      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."

      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.

  • by thundergeek (808819) on Monday November 08 2004, @08:10PM (#10761676) Journal
    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!
  • by LiquidHAL (801263) <LiquidHAL@@@gmail...com> on Monday November 08 2004, @08:13PM (#10761700)
    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.
    • by billyradcliffe (698854) on Monday November 08 2004, @08:49PM (#10761969) Homepage
      Yeah, unfortunately you failed to mention that all "extended warranty" information (actually called a "service plan") is stored in the Best Buy system, so that in the event of losing the receipt, that receipt can be retrieved.

      And it doesn't "extend the warranty," it goes above and beyond what a manufacturer's warranty will cover. Just simply read the terms of both plans and tell me I'm wrong.
      • by Gadgetfreak (97865) on Monday November 08 2004, @08:49PM (#10761972)
        After writing my previous response, I realize that the Simpsons sum it up nicely:

        Back at Moe's Tavern, Moe begins to put the crayon in Homer's nose.

        Moe: All right, tell me when I hit the sweet spot.
        Homer: Deeper, you pusillanimous pilsner pusher!
        Moe: All right, all right. [with a small hammer and chisel,
        taps the crayon further up Homer's nose]
        Homer: De-fense! [woof-woof] De-fense! [woof-woof]
        Moe: Eh, that's pretty dumb. But, uh ... [taps once more]
        Homer: Extended warranty? How can I lose?
        Moe: Perfect.
  • Wow (Score:5, Informative)

    by FiReaNGeL (312636) <fireang3l@hotmail. c o m> on Monday November 08 2004, @08:24PM (#10761791) Homepage
    So basically, they want people who :

    - Don't buy their "loss leaders", but stock up on their overpriced stuff.

    - People who don't check other companies price, but get attracted by the "Best price policy"

    - People who don't return their mail-in rebates.

    Why don't you just ask me to give you my money?

    On the Canadian side, FutureShop is exactly like that : Best price policy, overpriced stuff... and they "labeled" me a devil, for sure (a seller once "recognized" me : "Yes, I remember you...", first time I meet the guy). When price matching Camera-Canada for a new Canon G5, a seller even told me :
    -"I can't match that price, maybe remove 50$ off the total but that's it".
    -"But your policy is to match the price, and remove 50% of the difference"
    -"Yeah but I'll lose money that way!"
    -"Well its not MY policy, isn't it?"

    They promise you customer heaven, but slowly draggin you in hell. They're the devils, not us, the intelligent customers.
  • by Todd Knarr (15451) on Monday November 08 2004, @08:25PM (#10761793) Homepage

    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.

  • by I(rispee_I(reme (310391) on Monday November 08 2004, @08:28PM (#10761818) Journal
    I just went shopping for a computer at BestBuy with my dad last night. He selected one (going against my advice that he avoid intel and buy amd), and sent the clerk to get the box. The clerk returns with the shopping cart, containing the computer, a UPS, and a copy of Norton Antivirus. Here is the actual conversation that followed:

    Clerk: I just added these for you.
    Dad: Why?
    Clerk: This is a UPS. It will protect you against power surges and lightning. And this will protect you against all those viruses.
    Dad: I already have a surge protector.
    Clerk: Surge protectors are useless against power surges.
    [A moment of silence, no doubt induced by the store's mind-numbing window dressing]
    Me: Just the computer will be fine.
    Clerk: Okay, but if lightning hits it tonight and you bring it back to us tomorrow, we won't take it.
    Dad: That's fine. I'll buy another one.

    We proceed to checkout, where we are told that not purchasing a service plan puts our souls in danger of perdition, etc. My father has agreed to let me build his next computer.
  • by adam31 (817930) <adam31 AT gmail DOT com> on Monday November 08 2004, @08:35PM (#10761868)
    Meanwhile, Dell and others seem to be doing their best to attract those customers Best Buy doesn't really want.

    Man, Dell makes a living off being that girl that drops by 5 minutes after your girlfriend dumps you. And you wake up the next morning with a headache, an empty wallet, and a big smile.

  • Insurance/Warranty (Score:5, Interesting)

    by whoever57 (658626) on Monday November 08 2004, @08:38PM (#10761892) Journal
    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!

  • by Maul (83993) on Monday November 08 2004, @08:45PM (#10761940) Journal
    Customer: Hi, I'd like to buy this TV.
    Salesguy: I won't sell it to you.
    Customer: What? Why not? Isn't it the TV you advertised in this morning's paper as being on sale?
    Salesguy: Yes, you see, that TV there is just a ploy to get you into the store. I'm not allowed to sell it to you, I'm supposed to convince you that this TV is just a "basic" model and this other TV we have here for $300 is much better.
    Customer: I guess I'll just need to take my business elsewhere, then,
    Salesguy: Good idea!
  • Profiling 101 (Score:5, Interesting)

    by mcrbids (148650) on Monday November 08 2004, @08:47PM (#10761956) Journal
    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....
    • Re:Profiling 101 (Score:5, Insightful)

      by frohike (32045) <bard.allusion@net> on Monday November 08 2004, @09:33PM (#10762279) Homepage

      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!

    • Re:Profiling 101 (Score:5, Interesting)

      by NeoSkandranon (515696) on Monday November 08 2004, @09:34PM (#10762284)
      On behalf of all the computer enthusiasts who like taking a peek at old hardware, i have to wonder how many customers you drove away who just wanted to have a poke through a box of stuff that looked old as they were
  • Eh. (Score:5, Interesting)

    by RyoShin (610051) <[moc.liamg] [ta] [orakut]> on Monday November 08 2004, @08:48PM (#10761966) Homepage Journal
    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.
  • by DirkDaring (91233) on Monday November 08 2004, @08:50PM (#10761977)
    "They buy products, apply for rebates, return the purchases, then buy them back at returned-merchandise discounts."

    Go ahead. Try this. Apply for the rebate (by submitting the UPC symbol) and then return the product. You can't.

    Crap detector going off big time.
  • by Clod9 (665325) on Monday November 08 2004, @09:14PM (#10762149) Journal
    Another poster mentioned that Best Buy, like many other corporations, have changed their sales and marketing practices to such an extent that we now negotiate for electronics, rather than simply purchasing them. The price is no longer fixed: it depends on coupons you may hold, on a competitor's advertising circular you may have seen, your willingness to buy insurance^H^H^H^H^H^H^H^H^Hextended warranty coverage, your willingness to divulge information in order to claim a rebate.

    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.)

    • by defy god (822637) on Monday November 08 2004, @08:06PM (#10761645)
      [better formated for easier reading] (i just made this at Ars.. but thought it would bring more light into the discussion here)

      i worked for best buy for just about a year and quit around the time they were doing this training. instead of just one generalized customer, they've created 5 categories that would best fit their target groups. not all stores have all these categories. some stores may be a Jill or Barry, while others may be more of a Buzz. let me explain.

      Barry - usual income is over $100,000 - wants a "my guy" type of environment (similar to having a specific mechanic you go to, they want to be the epicenter where "Barry"s go for high end products, installation, information, etc). - time = money, so having a specialized, well trained place (a Barry specific store) to go to grab everything from install to products will be worth the money. they could care less about spending time to bargain shop. - will pay extra to have product delivered, installed, set-up in house

      Jill - "soccer mom" - will want a "shopping friend" that will help her pick out all the products with her (a specific Best Buy employee will literally guide her through the store and shop with her) - a prime target for in-home installations

      Buzz - early adoptor - wants the latest and greatest and usually doesn't stop to think about the price - 18-30 age group, college students, disposable income

      Ray - wife, and 2 1/2 kids - must consult with wife before buying - tendency to look for bargains

      Best Buy for Business - small business owner - will have a specific employee assigned to him/her as a conduit for business transactions - target for Best Buy's Geek Squad (tech department; aside from regular computer problems general customers have, Geek Squad for business users will be more of an "on-call" IT department. small businesses don't need a full-time techie on their pay-roll. so Geek Squad can come in for a "small" fee per hour, or last i heard, Businesses can pre-pay for an alotted amount of time per month)

      working for Best Buy gives one a different perspective. as the management says, they must continue growing to avoid Circuit City scenarios, or Walmart/K-Mart power shifts. the main competition they see is Walmart, Dell, Amazon, Ebay, and a fifth that slips my mind. so in order to grow, they're trying ot learn more about their customers. they're catering to specific customer needs of the area. so your local store can be labeled one of the 5 possible categories or a mix of them. employees are trained to identify who best fits what mold so they can pass them off to someone who can better help with your needs. the cynic in me also thinks the best employee to grab every possible penny from the customer, but that's just, argueably, business.

      just to give everyone the heads up though about a simple fact. from last i heard from management, if you look at the top ten list of what makes Best Buy profit, #1 is home theatre (big screen TVs, etc). want to know #2-10 ? it's their PRP/PSP (product replacement plan and product service plans). that's the main reason they push customers so hard about them.

      also, people sometimes wonder how they measure performance. employees aren't measured by individual performence (and that means non-commision). the deparments must reach given daily monetary amounts and percentages for specific things and that's how management keeps track. they make sure each employee says they are no on comission. what they don't say though is, the sales managers that are hounding each employee about the performance of numbers is given a "bonus" for the sales/rank/etc every month. so in essence, *they* are getting the comission.

      that's enough rambling from an ex-employee. hope it gives people a clearer picture. and for those wondering, i was in the computer sales / tech departments.
    • by div_B (781086) on Monday November 08 2004, @08:23PM (#10761774)
      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.

      Frankly, if they're not being evil, they're atleast being a bit cheeky. From TFA:

      They ["devils"] slap down rock-bottom price quotes from Web sites and demand that Best Buy make good on its lowest-price pledge.

      If they don't want to sell things at the lowest-price, then they shouldn't pledge to. Problem solved. But of course, that's no good, because what they really want is to give people the perception that they can get things for the lowest prices, without actually following through on it. My heart bleeds for them.
    • by mdfst13 (664665) on Monday November 08 2004, @08:31PM (#10761834)
      "These are customers that should be weeded out."

      Or Best Buy could just stop trying to fool their customers into thinking that they are getting a deal when they are really being screwed over. If Best Buy did not have crazy rebates, then they wouldn't be having people abuse them.

      It's like how Microsoft claims to lose money on each XBox sold. If people buying XBoxes to use as MythTV frontends costs Microsoft money, then maybe Microsoft should quit subsidizing the XBox. Problem solved.

      Personally, I think that customers buying Best Buy products purely for the rebates is great. It helps make up for the fact that 80+% of all rebates go unredeemed. Note that even if you subtract out the returned products from the sales and still include those rebates as redeemed, they still make up a redemption rate of less than 50%. Perhaps Best Buy will eventually drop rebates and just lower their ridiculous prices! Or they will just go out of business and I will continue to buy from Circuit City and the web. Either way works for me.
    • by ComputerSlicer23 (516509) on Monday November 08 2004, @08:41PM (#10761907)
      Well, I have to say, I can't object to Best Buy saying that customers who are buying things at rebate and returning them to keep the price difference. I can't object to them saying that people who return stuff specfically so they can come back and pick it up of the rebate table.

      People are abusing those benefits Best Buy provides. Now, I think the Mail in Rebates are bogus. I really wish it was required that they put the price I have to pay when I get to the counter on the price tag (I know CompUSA is notorious for this, not sure about Best Buy).

      Now, forcing people to honor their advertising about price matching. That I've got no problems with the customer doing. If Best Buy doesn't want to have to lower the price, they shouldn't have advertised it as part of their pricing. I don't know if Best Buy does this, but I know that I've heard some places have branded models that are only sold by a particular chain. They sell identical systems to 3-4 chains, but each chain has it's own model number. Thus they can claim that a competitor with a lower pice isn't exactly the same model, so the guarantee doesn't apply. That's crappy, but I'm not sure if that has any bearing on this article.

      I know I don't like them discussion that people "buying up all the loss leaders" are a problem. Especially when they are discussing that people are re-selling the items on e-bay. That is capitalism at it's finest. The market is being highly efficient there, they just need to realize that communication and on-line auctioning have forced retailers to be more price competitive. The world has moved on, and this is a point at which Best Buy is just being left behind (the fact that people will buy it for cost plus shipping, means either people are stupid, or Best Buy is taking a serious beating on the pricing). If Best Buy corporate had any brains, they'd setup small retailers to just sell them directly over eBay and move lots of items that way to see if they can benefit from the insanity of the purchasers.

      Retail is generally a very inefficient way to sell things. There's only a single price for everyone. They'd be much better off with auction style pricing (the optimal price is found in a good market). People pay what they believe something is worth, and the store gets the maximal amount of money the market will bear. As long as there are plenty of buyers for any given item, they'd probably get a better price then they do with the shelf price. Plus it wouldn't have to be trucked around the country, and they wouldn't need as much retail space.

      I don't like what they are talking about in terms of profiling. Part of my problem, is well, I don't dress my income. I had the same problem when purchasing a vehicle. Fortuantely when I went to get a house, I did the loan info over the phone. Sometimes it is nice to just be a number.

      Now, Best Buy's claim that 20% of their customers are doing this sort of thing is just silly. I'm highly doubtful that it is that rampant (it might be 20% of their transactions, but not 20% of their customers).

      Kirby

      • by teromajusa (445906) on Monday November 08 2004, @08:59PM (#10762046)
        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.
        • by dhakbar (783117) on Monday November 08 2004, @09:13PM (#10762146)
          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.