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Businesses The Almighty Buck

Office Depot Employee — "We Changed Prices Too" 492

Posted by kdawson
from the following-best-buy-out-the-door dept.
Avram Piltch writes "Last week, LAPTOP reported that Office Depot employees were routinely lying to customers about notebook inventory, telling them that systems were out of stock if they didn't want to buy extended warranties or tech services. Now LAPTOP has spoken to more Office Depot associates, one of whom goes by the name Alex and reports widespread altering of prices in his region. He says he even Photoshops higher price tags on clearance notebooks so that associates can tell customers that they're getting a free warranty or tech service, when the price has been raised to cover it. LAPTOP also talked to a representative from the FTC, who would not comment on Office Depot specifically, but said that the sales practices described by LAPTOP clearly violate federal law."
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Office Depot Employee — "We Changed Prices Too"

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  • by GodfatherofSoul (174979) on Tuesday March 17, 2009 @04:29AM (#27222697)

    Sadly, this is the attitude of many in sales in this country. Good Business is how much you can milk from your customers and how fast regardless of the consequences. I sat with a couple of sales guys (friends at that) last weekend who bragged back and forth about how they were literally screwing associates.

    Paraphrasing a quote from The Grapes of Wrath, "Steal a tire and you're a criminal. Sell a man a tire with a hole in it and that's just good business."

    • by Tx (96709) on Tuesday March 17, 2009 @04:58AM (#27222791) Journal

      I sat with a couple of sales guys (friends at that) last weekend who bragged back and forth about how they were literally screwing associates.

      But surely their sex lives are perfectly fair game for a bit of bragging?

    • by s1lverl0rd (1382241) on Tuesday March 17, 2009 @05:20AM (#27222865) Homepage
      Of course selling a tire with a hole in it is good business! Ever tried selling a tire without one?
    • by Dhalka226 (559740) on Tuesday March 17, 2009 @06:23AM (#27223147)

      There's enough greed to go around, certainly, and I don't support deception--but the consumers love to bitch and moan but they're never willing to accept their own share of the responsibility.

      Why is it so important to these companies to push service plans and insurance and batteries, and mark up a cable to $60 and sell you a hot apple pie with that? Because they've slashed their margins on the things you're actually there to buy so low trying to get you in there to buy them. Think about the people you know. If they could choose between Store A which has their product at $300 and Store B that has it at $250 but are going to push as hard as they possibly can to get you to buy their $50 warranty, which are they likely to choose? The majority of people are going to choose Store B and then bitch about the pressure to buy a warranty as if the two things were unrelated.

      I don't condone deception or fraud, but it's this prioritization of the lowest price above all else that brings these things about. It's a lot like how people bitch and moan about Wal-Mart strangling out small mom and pop shops that had that friendly atmosphere and great service. They're dead because they weren't willing to pay for that service; they'd rather save a few bucks by going to that Wal-Mart. So be it, it's their right as consumers--but let's not be naive about the choices being made.

      • by Fred_A (10934) <fred@freIIIdshome.org minus threevowels> on Tuesday March 17, 2009 @06:50AM (#27223283) Homepage

        Because they've slashed their margins on the things you're actually there to buy so low trying to get you in there to buy them. Think about the people you know. If they could choose between Store A which has their product at $300 and Store B that has it at $250 but are going to push as hard as they possibly can to get you to buy their $50 warranty, which are they likely to choose? The majority of people are going to choose Store B and then bitch about the pressure to buy a warranty as if the two things were unrelated.

        Sad but true. Remember that even structures like IBM gave up on selling PCs because they couldn't make a profit on them.
        And for having known very intimately the workings of [very large western computer maker (not Dell)], the margins were (it got sold since) in the 1.5% range. It's a nasty business.
        Nowadays the "brick and mortar" retailers have to fight the online resellers who have quite an edge on them. So if anything the fight has gotten even more nasty (but then with sales people, what can you expect ?).

        • Re: (Score:3, Insightful)

          by AvitarX (172628)

          Wal-Mart's margins are very low too.

          It makes it very difficult to compete as a smaller business, since 2-3 percent of a shit ton makes you rich, but 2-3 percent of a couple million leaves very little.

          I'm not trying to weigh in on good vs bad in this situation, and I have certainly seen a Wal-Mart revitalize a main street here [google.com], but in general I find them very depressing stores full of shoddy crap. I don't like how they and Home Depot wield enough power to get name-brands to make shoddy version of their prod

          • by hairyfeet (841228) <.bassbeast1968. .at. .gmail.com.> on Tuesday March 17, 2009 @09:48AM (#27225171) Journal

            Well IMHO the key is you DON'T try to compete with a Wal Mart or a Dell, you just find your own niche. I have watched countless shops that I have done freelance work for fold because they were stupid enough to try to get into those markets and as other said you just can't compete with them on price. The worst is laptops, I don't know how many PC shops I have watched go broke by getting into the laptops sales and repair game. Yes, laptops are more popular right now, but Dell and the like rip you off so bad on replacement parts and they are so proprietary on the designs that even having an identical model on the outside often means the internals may not be compatible if the have switched revs. And of course with sales the laptops are so dated so quickly that the customer can end up getting a new for cheaper than a used.

            So how come my little shop is still here and doing okay? Because I found my own niche. I can't compete with Dell or Wal Mart on a new desktop price wise, but I design the machine to what the customer needs. I also take a lot of the work out of it when they buy a desktop or laptop through me as I take the time to set up the AV, antispyware, defrag, data backups, etc on a schedule based on how they use their machine. Leave the PC on 24/7 and don't use it late at night(like my last customer)? Then I set everything up to take care of itself at 3AM so by the time you come into work it is ready when you are.

            The key to dealing with the prices of the Wal Marts and Dells is NOT to try to play the game on their rules, but to change the rules. I make sure my customers know the differences between what you get from Dell and what you get from me. How I design the specs based on their usage and how long they plan on keeping the PC, with a clearly written upgrade path so if they plan on keeping machines for many years it has the capability to grow with them. But trying to make yourself look capable of competing with the big boys and then pulling asshatery like in TFA is the surest way to alienate your customers. Folks don't like to feel used. Better to offer them a good value and compete on service than to use lame trickery like in TFA. I just hope they get royally busted for the crap they are pulling.

      • There's less money than there is debt. Everyone is constantly trying to cut their costs and ensure future revenue streams because *everyone* has these interest payments to make.

        Never wondered why everything is cheap disposable crap these days? It is because a dollar today is worth two tomorrow. We are all chasing inflation.

        If money were stable, companies could afford to produce high quality long lasting products and the margins on them wouldn't be a problem, after all they are long lasting. As it is, they c

        • Re: (Score:3, Insightful)

          by Mr Pippin (659094)
          Excellent point. To bad most either don't know that their money is PURPOSELY inflated to encourage people to NOT save money, or fall for the "liquidity" excuse.
      • by furby076 (1461805) on Tuesday March 17, 2009 @08:06AM (#27223907) Homepage
        Your confusing issues here. These stores are lying to their customers - that is wrong, period. In your example, a good sales person will say "we are $50 more expensive then the other guy but here you get a warranty, there you have to pay an extra $50 for it" So the customer can decide if they want the product with or without a warranty. Show why your product is better, or if the products are the same then show why your stores services are better. If you are honest you will get repeat business. If you are dishonest you will get irate customers who will bitch to you, your manager and worse for the store...their friends.

        hard sell tactics are one thing...lying is another especially when you hit fraud which is against the law.
        • by Archangel Michael (180766) on Tuesday March 17, 2009 @10:20AM (#27225677) Journal

          This doesn't work, at all.

          Here's my story, from back in the day (late 80s early 90s), but I'm sure it is still the same today.

          I worked at a small town computer store that was geographically isolated away from any big city. We had HP Printers (Deskjets) on sale for around $400-500, and people would price shop the crap out of them. To the point that they would drive 90 miles to save 5 - 10 dollars (seriously). That 5-10 was about what our margins were.

          I was commission sales back then, and quite frankly it cost me money to sell those things. Someone would come in price shopping for a printer, I'd point to the printer and say "the price is clearly marked", and if they mentioned they could buy it for $5 less 90 miles away, I'd turn and walk away.

          Yeah, I was an ass over it, because I saw too many of those people willing to drive 90 miles to save $5.

          The funny thing is, about 1/2 the time, I'd see the very same people in in a few days, needing a cable for their printer, because nobody at the other store told them they needed a cable.

          Now the cables we got cost us $.50 ea. YES FIFTY CENTS. And we sold them for $14.95 or something. I made more money on a cable than the printer.

          So, when people complain about sales associates that don't know shit, or act like they don't care, that is probably right. They probably don't care or don't know. What do you expect when you're asking them to bleed the last ounce of profit out of a product.

          By the end of my stint there, I sold equipment practically at cost. I sold the hardware as a means to sell services. If you wanted help, I'd charge you for training or whatever. If you wanted to buy a computer or printer, I'd say which one and try to ring you up at the register as fast as I could, because you were costing me.

          I'm sure plenty of people thought I was lying (though I never did). I'm sure plenty of people thought my service sucked. But the people who paid for my service always got top notch. My last day at the store, I accounted for 1/3 of all sales, and 25% of that was services. The other 5 sales persons fought over the other 2/3 and didn't have much in services. I was nearly 60% of the store profits on sales and service.

          I left, and within six months they were out of business.

      • by Eponymous Coward (6097) on Tuesday March 17, 2009 @08:16AM (#27224009)

        Zappos is good example of store that differentiates itself from the competitors with customer service. From what I've heard, they are doing quite well. My family buys most of our shoes there (probably only 6-8 pairs a year).

        There are lots of stories on the net about Zappos legendary customer service. I think the key is that you can't just have good customer service- it has to be outrageously good. And you have to be savvy enough to get the word spread by others.

      • by Herkum01 (592704) on Tuesday March 17, 2009 @09:03AM (#27224561)

        Yeah right it is the customer. What about Christmas sales, or more correctly after Christmas sales? Companies hate that consumers will try to wait until after Christmas when companies make huge discounts on products to clear out their inventory. So why should the customer pay full price when next week it will be 25% off? Oh yeah, the bean counters say that it costs more to store product that is out of season, because they bought it on credit, than to hold onto it. So on clearance it goes!

        Companies love to bitch and moan about customers to, but business taught the consumer everything they know. So I guess businesses are their own worst enemy!

        • Re: (Score:3, Insightful)

          by jrumney (197329)

          What about Christmas sales, or more correctly after Christmas sales?

          You mean the "sales" where they put things back to their former price after the pre-Christmas price hikes.

      • by King_TJ (85913) on Tuesday March 17, 2009 @10:53AM (#27226269) Journal

        The extended warranties and service plans would be FAR easier to sell if *those* things were honest in the first place!

        Honestly, I tend to *like* the service plans, in theory, on many of the things I'd buy at a store like Office Depot. My resistance to them comes from being screwed over on multiple occasions when I went to actually USE one of them!

        As one example, years ago, I purchased the 2 year extended plan for an HP inkjet printer I got for my work. I knew that out in the shop where it was used, they had a track record of breaking or wearing out the things on about a 1 1/2 year basis, so I figured it was a good gamble we'd use the plan. Sure enough, it broke down - so I called the ext. warranty toll-free number and tried to make a claim. Turns out the company went bankrupt and all warranties were transferred to a different firm. When I called THAT firm, they had "no record" of my warranty - and told me I needed to go to Office Depot and have them look it up in their file, and fax over proof.

        I went through that whole fiasco, only to have the place refuse to pay to replace the printer with a comparable unit. Instead, they said all they were willing to do was mail me a check for the cost of the extended warranty and wash their hands of it!

        As another example? I paid about $100 for a furniture warranty on a new sectional I bought at "Weekends Only". The microfiber started tearing in a corner, so I called to make a warranty claim. The place was *impossible* to work with though! They kept putting me on hold for 30 minutes or more and hanging up on me, or insisting the person handling the "Weekends Only" warranties was out of the office, and to "leave a voicemail". After leaving numerous messages, I got them to return my call a total of 2 times, both at odd hours (like late evenings, at my work number, when I was already long since back at home), so they left me messages simply saying they "tried to reach me" and to "give them a call back at my convenience". Never was able to get any service before the warranty expired, and I *still* have holes in my sectional!

    • Good Business is how much you can milk from your customers and how fast regardless of the consequences.

      In my experience "Good Business is how much you can milk from your customers and how fast while staying out of jail". But then anyone who has talked to the sales guys from his company (or who has been on the receiving end of the sales guys of any other company) knows this.

      (very) Slightly modified pitch I was delivered a few years ago :
      "Oh yes, our router cures cancer, sure."
      "And we'll have world hunger as an option next year"
      "Would you sign here please ? I'll let you keep the pen you know. It's shiny."

    • by smchris (464899)

      In the trenches, it's all they have. It's what they are.

      Case in point. My stepfather thought he was being cute getting his "free $1000 life insurance policy" but the fool gave them my name. The letter they sent me was _amazing_. I started with technical issues like the inside address in all caps that didn't close up the second address line and progressed through the spelling and grammar errors to find a dozen things wrong with that letter. Made me do some research to find out whether the company was fo

    • by WCMI92 (592436)

      "Sadly, this is the attitude of many in sales in this country. Good Business is how much you can milk from your customers and how fast regardless of the consequences. I sat with a couple of sales guys (friends at that) last weekend who bragged back and forth about how they were literally screwing associates. "

      This sort of thing usually gets the scum in the end though. You can screw someone once on a sale, and make more money than you deserved, but to succeed with it forever you have to make sure the custom

    • by Scutter (18425) on Tuesday March 17, 2009 @07:02AM (#27223383) Journal

      Sadly, this is the attitude of many in sales in this country. Good Business is how much you can milk from your customers and how fast regardless of the consequences. I sat with a couple of sales guys (friends at that) last weekend who bragged back and forth about how they were literally screwing associates.

      I don't think that word means what you think it means.

    • by Lumpy (12016) on Tuesday March 17, 2009 @07:38AM (#27223663) Homepage

      And it's how I am thriving in this economy and others are not.

      I have been pissed at how customers have been treated for a while now. I vowed to give top notch customer service and it is paying off. I still get jobs for photography in this really tough economic climate. When a corporation weighs paying you $1500.00 a day to do photography for them or have kenny in accounting who is handy with a camera do it on the clock, you had better bring to the table something that they remember.

      Circuit City died because their business motto was "screw the customer" we will see a whole lot more businesses die in the water this year simply because they have the same attitude.

      Honestly, good riddance, the world is better off without companies like that.

      • by Thaelon (250687) on Tuesday March 17, 2009 @11:17AM (#27226691)

        Screwing the customer pays off now. Treating them excellently will pay off for decades.

        But most brain-dead execs and investors are too impatient, and too focused on quarterly results. If you want a really good business, focus on results four years from now instead of four months from now.

    • by furby076 (1461805) on Tuesday March 17, 2009 @07:47AM (#27223753) Homepage
      This is nothing new. I remember when I was a child there was this toy that I wanted. Before christmas it was $30, during christmas it was marked down 30%....it was $45.
      I am looking to buy a car...Edmunds and KBB both state $25000 for the car...dealerships "those two places don't know what they are talking about. They are looking at national prices"...except both sites have a place for you to enter your zip code. They also said "they don't take into consideration pre-certified", except Edmunds DOES ask if this will be pre-cert or not (and changes the price accordingly). One place w ants 20% more for a car that is less equipped then the other place and literally states the other dealership (same company) is cutting corners. The list goes on.
      Sales people can be very dirty...not all of them. When I was in college I worked in retail banking and would give my customers the truth - even if they didn't like it. My customers kept coming back to me for advice (we are talking about 50 year old lawyers asking advice from a 21 year old college student) because they knew I wouldn't lie to them. I would even tell people "hey I don't recommend you buy this product of ours, it's not the best for you". We have honest sales people, but most sales people want the quick sell...they don't think about their reputation. My step-dad was in life/health insurance all of his life. Upstanding, and honest. He has been retired for the past 20 years and still gets calls everyday based on referrals from referrals from referrals. People want to do business with him which he just shifts to his former partner.
      Be honest, and true to your customer. It may take you longer to get the big bucks, but 5-10 years down the road and you will be thankful you did.

      BTW the one dealership that wanted 5k more then the other. TOld me things like "last month we sold ALL of our pre-certs, this is new stock we are not hurting for your business and won't budge on the price"...they called me a week later...budging on the price. So if you are looking to buy a car big advice - if they don't hit your price...walk out. Don't be afraid to low-ball them, they will do the same to you on the opposite end. And every promise they give MUST be in writing before you sign any documents.
    • by jellomizer (103300) on Tuesday March 17, 2009 @08:33AM (#27224217)

      We need good consumer classes in school. I remember back in school (6th grade) we had 1 class (like 1 45 minute block) dedicated to seeing how advertisers make us interested in the product. That was one of the most impressionable classes I have ever took. Ever sense then when I look at these adds I can go wow they said the product name like 20 times in one minutes. Or listen to the scary music in the background when they show the competitor.

      Americas success of capitalization is dependent on smart consumers. Brainwashed consumers are not good for capitalization and could cause it to fail.

    • Re: (Score:3, Interesting)

      by Molochi (555357)

      When I shop for a sale item in a big box store, I expect the sales person to try to pad the the price. The "we're out of stock" trick mentioned in the article has been used for a long time.

      I had an acquaintance 3-4 years ago who's a computer tech. He'd buy several notebooks, system deals, free after rebate hardware from OD, BB, whoever has the super deal going on, each month. This stuff was all resold to clients and he did/does it because it's cheaper than buying wholesale or building systems himself. The g

    • Re: (Score:3, Insightful)

      by hey! (33014)

      This is like the "guns don't kill people" thing.

      Salesmen don't screw customers. Companies do.

      Salesmen do one thing, they sell. Just like chainsaws do one thing: they cut. That doesn't mean that your arborist has to run around in a hockey mask terrorizing people.

      Anybody who has worked with salesmen know that they quickly create problems for a company that greedily turns a blind eye to what they'll do to make a good sale. You select salesmen by their willingness to do anything to sell. For crhissakes, y

  • by El_Muerte_TDS (592157) <elmuerte@Nospam.drunksnipers.com> on Tuesday March 17, 2009 @04:34AM (#27222725) Homepage

    Well, except that for once sales people admit that they lie to customers.

    • by commodore64_love (1445365) on Tuesday March 17, 2009 @05:31AM (#27222927) Journal

      Most salespeople will admit they lie if you ask (outside the store). When I worked at Sears I couldn't stand how much pressure management placed on us to sell ripooff "extended warranty" contracts. We were expected to lie and convince customers that it was a good investment, when in reality most extended warranties go unredeemed. Most hardware will last a long, long time after it survives the initial 3-6 month "infant mortality" period... there's no need to extend the warranty, except to pad Sears pockets with free money.

      If I worked at Office Depot, Best Buy, or some other place that engaged in illegal tactics like saying, "We don't have that laptop in stock" even though you have several, or creating false price tags, I'd start collecting documentation so I could turn it over to the FTC.

      Yes I'd be a whistle-blower. I cannot tolerate corruption. (Of course that also means I'd probably be blacklisted by our corporate overlords.)

  • by dattaway (3088) * on Tuesday March 17, 2009 @04:35AM (#27222731) Homepage Journal

    Apparently the rogue salesman wasn't impressed with my wanting a "cheap Linux laptop" and told me there were none left. Never mind I checked the website half an hour earlier before coming in and there were about 270 in stock at that store. So I went up front to customer service. They checked for stock and had two people help me. One to go back and fire the salesman and the other to get my laptop. That store appears to have stopped the practice of giving salesmen credit for purchases soon after. The salesmen no longer act like vultures. Customers do the store and community great service by reporting the problem.

    • by rolfwind (528248)

      I stopped going to Microcenter when they jacked up the price of the simplest cables to something ridiculous.

      Just buy electronics online from a reputable source. Save the hassle.

      • by Ihmhi (1206036)

        Microcenter is like Toys 'R Us for adults, and I'd rather shop there than a bigger store.

        They, like all businesses, do have their problems, though. The phone system for the North Jersey Microcenter is complete shit.

      • Kind of like how retail stores sell RAM for way too high of a price? I could go to Staples to buy a 1 GB stick of DDR RAM for about $40-$50, or buy the same thing on newegg for around $20. Staples (and other retail stores) are targeting people who are either unaware of online sources, or have broken computers (failed RAM) and are unable to shop online, so they go to the store.

        It's great... rip of your customer in their time of need. I guess it makes sense from a business standpoint, in the short term any

    • by Bert64 (520050)

      Yes, sales staff often try to make you buy more expensive products...

      I went to buy a mobile phone a few months ago and was told that insurance was mandatory on it and he wouldn't sell me the phone without it. Luckily the law states that you need to have a period when you are entitled to cancel the insurance and get a full refund, which i did... I also sent a complaint at the time of canceling.

      • by commodore64_love (1445365) on Tuesday March 17, 2009 @05:47AM (#27222981) Journal

        Sometimes though "reporting it" does absolutely no good. The damn government which is *supposed* to help the People which created it, refuses to do its job and crack-down on dishonest businessmen. Case in point:

        I was staying at a Motel 6 week-after-week, and everything was great. Then about 6 months (and $3000 room rent) later the manager decided to no longer accept the "click to get 10% off" that I had been using via the website. I contacted the national office who said he MUST honor the rate. The manager responded by saying, "I am sick and tired of you. I told you I don't do the 10% off rate, and you refuse to listen so I'm kicking you out of the hotel." He ignored what the national office had told him to do (refund 10% of my money), and even went so far as to call the police and have them remove my luggage from the room. I complained to the Virginia Consumer Protection department, and they didn't do shit other than talk to the manager. The manager made-up a bunch of lies about how I had sex with a maid (false), yelled at employees (I'm quiet and timid, not a yeller), and falsified reservations (impossible; I'd have to hack the central corporate computer to do that). The VA government was completely worthless and this manager is still mistreating customers (I was not the only victim as it turns out).

        Those reading this probably think this is non-relevant, except that it is. It goes back to Customer Service, and the lack thereof. Whether the product is hotel rooms or laptops, there is a prevailing attitude amongst Sales people and managers that WE the customer are there to serve them.

        I hope the current economic collapse quickly corrects that misconception. Without customers, business can not survive. Mistreat the customer and soon you'll be the next Circuit City.

        • Re: (Score:3, Insightful)

          by Shakrai (717556)

          The manager made-up a bunch of lies about how I had sex with a maid (false)

          Only in the South would having sex with a maid be grounds to get you kicked out of a motel. Around here it likely wouldn't even be noticed. Did she consent? Was she on her break? Then what's the problem? ;)

          The damn government which is *supposed* to help the People which created it, refuses to do its job and crack-down on dishonest businessmen

          I don't recall cracking down on dishonest businessmen being part of the constitution. Your story sucks and I'd like to know which Motel 6 it was so I never give them any of my money but at the end of the day the motel has every right to refuse to do business with you for almost any reason they want.

          • by PopeRatzo (965947) * on Tuesday March 17, 2009 @07:31AM (#27223595) Homepage Journal

            I don't recall cracking down on dishonest businessmen being part of the constitution.

            And I don't recall that Constitution contains the absolute totality of our society's laws. There's a real problem with turning a constitution into some quasi-religious document that is supposed to be the alpha and omega of all rights that exist.

            That's why it's sometimes called a "framework" on which other social contracts are built.

        • by Sj0 (472011)

          Yeah, it's a constant problem from my perspective: Even when I want to buy something, often companies don't want my money.

          It must be nice running a business that doesn't have to make money.

        • by Bert64 (520050)

          Was his motel even full at the time?
          A lot of hotel managers would rather rooms sit empty than offer them out at a discount... They'd rather make a loss on the room than the smaller profit they would make from a cheaper room.

          This happens in all kinds of businesses too, i knew someone who rented a rack full of servers, most of which sat idle because he was waiting for high paying customers, and wouldn't rent them out cheaper on a short term contract (where they would only be using the power and bandwidth he a

        • by Skater (41976)
          Motel 6 is horrible. I like to call them "Motel 666". I used to be in a cycling club, and we almost always used Motel 666 when going to races. There wasn't a single trip that year that Motel 666 didn't somehow screw up our reservations, usually in new and creative ways. I assume we kept using them because they were cheap, but I'm not sure it was worth the aggravation. One quick example of the problems we encountered: one time they lost our reservations, so we booked new rooms, then they woke us at 3 a
  • by Anonymous Coward

    The managers of these unethical scum are completely aware of what is going on.

  • by Anonymous Coward on Tuesday March 17, 2009 @04:59AM (#27222795)

    "LAPTOP" is not a universally known group, even among geeks. You need to explain who they are. That's just good journalism.
    Haven't you ever hung around a person who said "Hey, man, so did you hear about the thing?" and you just look at them dumbfounded because you have no idea what he's talking about?

  • by mosb1000 (710161) <mosb1000@mac.com> on Tuesday March 17, 2009 @04:59AM (#27222803)
    I used to work there. I can see how their employee incentives would lead to these kind of practices. There's something wrong when your focus has to be selling an "attachment" item over the actual product. And no one ever uses their extended warranty (don't tell me a story about a time you used it, you're the exception, not the rule) It's dishonest. Insurance on an item you can afford to replace is always a bad deal.
    • Re: (Score:2, Informative)

      by Anonymous Coward

      For the company is used to work for selling electronics in the UK the statistics for claims on our extended warranty was something around 90% of people claim under within 5 years for laptops, 70% for desktops. These figures were from about 3 years ago so i'm not sure if thats changed now but clearly people do use these things.

      I'm not trying to suggest they are good deals or that the price of repairs were much lower than the cost of the warranty in many cases but saying that no one ever uses their extended

      • by commodore64_love (1445365) on Tuesday March 17, 2009 @06:05AM (#27223059) Journal

        >>>For the company is used to work for selling electronics in the UK the statistics for claims on our extended warranty was something around 90% of people claim under within 5 years for laptops, 70% for desktops.

        First off - consider the source. Citing statistics from the company selling extended warranties, is like citing a cigarette company which claims "menthol" cigarettes improve health. I don't believe the stats, since the "mortality curve" shows most hardware either dies within the first 6 months, or after 10 years, with very low mortality in between.

        And even if we assume those stats are real, it's still a very bad deal for the customer. Paying $200 for a 5-year-old laptop or PC, which you could just buy on ebay for $50, doesn't make much sense. That's why extended warranties are so profitable.

        I had an extended warranty on my 97 Dodge. The car did have problems initially, but those were covered free-of-charge by the manufacturer, and afterwards I drove the car 120,000 miles without flaws. I never needed to buy an extended warranty; it was just wasted money.

      • Extended Warranty (Score:5, Insightful)

        by Samschnooks (1415697) on Tuesday March 17, 2009 @06:09AM (#27223077)

        ...that no one ever uses their extended warranty is just fantasy on your part.

        That's assuming you actually can use it. Many times, when you actually try to make a claim, the insurance company that backs the warranty, will not back it up - they'll find something in the fine print of the contract that they'll use as an excuse to tell you to take a hike; which then it becomes a battle. Many times, they don't even have a legitimate reason not to honor the warranty, but they do anyway because they're crooks.

        A Consumer advocate's take:

        Why extended warranties are a rip [clarkhoward.com]

        Why extended warranties are no good [clarkhoward.com]

      • by Bert64 (520050)

        The chance of a given appliance failing, assuming you have quite a few, is pretty slim...
        What if you were to open a savings account, and pay into it all the money you *would* have spent on extended warranties...
        You will find that before too long, that account has more than enough money in it to replace one or two items if they were to fail, but that most failures occur within the first year (covered by the default manufacturer warranty) anyway.

        In terms of those claims on the extended warranty, during the fi

  • by Anonymous Coward on Tuesday March 17, 2009 @05:02AM (#27222809)

    I worked for Officemax for 4 months, it was routine for me to lie to customers, change prices, say we didn't have something and stare at it, laughing all the while with my manager. I didn't particularly find it funny, but I needed the money. I quit that as fast as I can like any other respectable person.

    Look at it this way though, although they may be screwing their customers, the average person that buys their computers from them have no idea how to use a computer. These are the people from personal experience want to return and or "have us service it in store" at any given time noon or night. I mean honestly how many of you have bought them from the store recently?

    Wanna know how to get around shady clerks who don't want to sell it to you? Just go on the internet and have it shipped to the store, that way you can still act like you got it from them, or even easier if you wanna go to the store first just special order it from the warehouse. After I figured out how to do those 2 things at Officemax I had customers tipping me just for being helpful. It really was a learning experience though; working on typewriters older than me.

  • Profit margins (Score:5, Informative)

    by AnalPerfume (1356177) on Tuesday March 17, 2009 @05:19AM (#27222857)

    This type of behavior is all to do with the profit margins. They have to cut their profit margins wafer thin on the products themselves due to competition, but extended warranties are mostly pure profit. Most people who buy an extended warranty on any product (not just PCs) won't need to claim against it within the time covered, and even if they do, no doubt the small print will have something which exempts that particular issue so they'll never have to actually pay out on it. The small minority who do have to claim and have the warranty pay out often find that one claim pays for the warranty.

    The thing that many people don't take into account at the time of purchase, is that if the unit breaks in 4 years, do you want the same thing repaired, or do you want newer technology? If you bought an XBOX which needed repairing 3 years later, wouldn't you rather use that same warranty cash (in part) for an XBOX 360?

    I used to work for an electrical retailer in the UK, and the pressure on sales staff to get a certain percentage of their sales figures in extended warranties and instore credit cards (where the compound interest rates were horrendous) was immense. They'd rather you had a little sale with a large percentage of the total price being a warranty, than a large value sale which was all product. They even tried to bully us into visiting the area manager to explain our lack of target achievement.....needless to say, I'm not there anymore. As a customer, it is handy to be able to cut the sales staff off with "I used to sell these things, I know the deal, forget it" when the "would you be interested in....." line comes up.

    We got told we could offer discounts ONLY if an extended warranty was being bought at the same time, or they were opening an instore credit card. We were encouraged to just tick the "payment protection" box because it saves time explaining what it is, and it's more profit. I insisted in explaining to the customer as I felt like I was cheating them if I decided for them.

    This type of behavior does go further than my ex-employers would go (at the time I worked there at least). It's gonna be interesting how many complaints / lawsuits they get from disgruntled customers who never realized something was fishy at the time but suddenly the penny drops that it happened to them. If this does get through courtrooms / inquiry where the allegations are proven true and they are punished for it, it'll be a hellava hit on their reputation for a while to come. Right now no companies can afford to lose customers.

    • by Brickwall (985910)
      On the other hand, when I bought my Chrysler minivan, I did purchase the extended warranty, and it paid for itself many times over when the air conditioner failed three times after the standard warranty had expired. But cars operate in much harsher environments than most electronic goods; if it works out of the box, it will probably operate just fine for years. My Dell has been on practically 24/7 for five years; I reboot it once a month. But here in Canada, I've been offered extended warranty on many house
      • by tomhudson (43916)

        You still got ripped. There was a recall on Chrysers because of defective AC condensers. Just like anyone who bought a Neon - Chrysler finally had to admit that the head gaskets were defective and pay out way out-of-warranty.

        And Ford with both the fuel pumps and front coil springs on the Focus.

        The extended warranties protect the merchant from being sued over a product that doesn't last a reasonable time, not the buyer.

    • I paid extra for an extended warranty on a Gateway laptop (back when a Pentium II 233 was king) and it went wrong with about two months left to run. Called support, it was picked up the next day and within a week they'd sent me essentially a new machine. The only old part was the CD-Rom drive which still had the foam I'd attached to damp the vibration.

      So they aren't always useless.

      P.S. The machine still works, with RH6.2 on it that I installed to learn about Linux.

    • by rtb61 (674572)

      Cut profit margins, I see you buying into that whole yarn. This is all about maximising profits, this is all about maximum short term bonuses for the executive team, this is about making the companying look as attractive as possible in the short term to maximise share price and of course all about a total disregard for the future, for anything beyond the this financial year.

      Lie, cheat and steal as an accepted corporate business tactic, lie to customers, lie to employees and lie to shareholders. This is a

  • Hmm (Score:5, Insightful)

    by ShooterNeo (555040) on Tuesday March 17, 2009 @05:20AM (#27222867)

    Why the heck does anyone buy electronics from brick and mortar stores any more? Yes, occasionally you can find "deals" compared to online - but those always HAVE to be at a loss compared to online stores.

    The reason is that online stores have several massive advantages. Economies of scale are one : newegg.com and the others can supply the entire United States with electronics using just a few large warehouses, with heavy use of automation. The real estate, labor, energy usage, advertising costs, management...it's all cheaper with a few large warehouses.

    The second massive advantage is that electronic goods inherently plummet in value very rapidly. The longer something sits in inventory, the less money the store makes by selling it. Again, the online stores need vastly smaller inventories relative to their total sales, and I suspect sometimes work so efficiently as to unload goods from the shipping containers from china and immediatly send it on the buyers.

    I know what most of you are going to say : "instant gratification" isn't there. True. Still, electronics are cheap and light to ship. It's cheaper to have a video card overnighted from newegg than it is to pay the usual price the same video card is listed at in Best Buy.

    The overwhelming majority of us don't need instant gratification, we can wait 2 days. If we are doing something where high uptime is critical, then it's still cheaper to order a few extra parts from newegg as spares than it is to buy stuff from Best Buy or Fry's. Or just keep your old stuff for spares.

    • Re:Hmm (Score:4, Insightful)

      by Starayo (989319) on Tuesday March 17, 2009 @05:38AM (#27222953) Homepage

      Why the heck does anyone buy electronics from brick and mortar stores any more?

      Because just like people won't do a fucking google search to answer their questions, they won't shop around online.

      Also, the FUD regarding online transactions. "But the hackers can steal my credit card and put it up on the youtubes!" is one I actually heard.

      Most brick-and-mortar stores that your average joe will go to deal with the majority of people that just want a computer to "check my email, use word and watch the youtubes". I can't speak for chains, there being no real big computer-centric ones in my country, but most of the computer shops I've seen maintain a small brick-and-mortar store, while simultaneously operating an online store. It seems to work pretty well for them.

    • Re: (Score:3, Insightful)

      by dattaway (3088) *

      Because some of these stores are actually front ends of large regional distribution wharehouses. At the Microcenter down the street, they may have several laptops of a certain brand in the retail area, but they often have several hundred more of that model on pallets in back. I know that store doesn't sell them all through the front door as they could have hundreds one day and only several left the next.

      • That's a pretty clever idea, actually. If Microcenter maintained just one combined warehouse/store in every major U.S. city, they could provide super fast shipping to most customers in the United States AND keep those that want instant gratification supplied with electronics.
    • Re:Hmm (Score:5, Insightful)

      by TuaAmin13 (1359435) on Tuesday March 17, 2009 @05:50AM (#27222995)
      How about demoing?
      I would never buy anything of considerable expense (TV, laptop, etc) without looking at a placeholder model. Is the keyboard too crunched, is the screen shitty? What's it look like sitting next to another model you were thinking about? Stuff like that you can't tell online via reviews. I was deciding between a 901 and 1000HE eeePC, had the dimensions drawn out on a piece of paper, but couldn't decide which I liked more. Physically seeing both models helped me pick.

      Maybe at that point I might check back online for a better price, but not without going to a B&M first.

      Secondly, you underestimate the power of local support. I'm definitely not waving the Geek Squad flag here, but with some purchases it's better to go with a local vendor for faster support.
      • Good point, sorta. To be honest, I feel like online reviews, as long as I read a variety of professional and amateur reviews from a wide variety of places, give more accurate information than my own 2 eyes. The reason is that even if I physically go to see a demo, Best Buy doesn't have every product available, while online reviewers, especially the pros, have the experience to compare a product to all that are available in the market. Another excellent source of information is message boards : overall, I
        • overall, I think message boards provide the most accurate, unbiased information for a particular subject.

          Really? There's no asymmetry? I'd think maybe you'd have to like a product very much to voice good opinions, but not hate it quite as much to dis it.

          I guess if all products get the same slightly more negative or positive (or in other ways skewed) forum feedback, then it evens out. Maybe.

          But I think that the motivation to tell the world how you feel is going to make you deliver a more true message than money (reviewer salary), money (get-the-facts advertisement) or money (volunteer reviews for some organi

    • Re: (Score:3, Insightful)

      by furby076 (1461805)
      There are a number of reasons. Here are a few.
      1) Finding a quality retail store. With all the different "certifications" & "seals of approval" you never know if the online store is really reputable or just a "sweat shop"
      2) Return policies in stores are so much better (typically). Most online vendors require you to pay S&H and won't refund S&H. if it was a large item (52" plasma) that is expensive.
      3) Need to return a defective item? You may be told "you have to deal with manufacturer not us" e
  • Do your research online first, then you can pretty much tell who is full of bullshit.

  • This is the same reason I car shop at dealers that offer fixed pricing. No screwing around with what is available, and how much it costs. If you have the product I want at a fair price, I'll purchase it. If you don't, I'll walk out without spending a dime.
    • Re: (Score:2, Informative)

      by park3r (833325)
      I've never understood this. Why would anyone be satisfied with paying up to $10000 more than a car is worth, just because they "simplify" the buying process by not allowing you to negotiate on price. Maybe I'm in the minority, but I always want a deal when I buy a car. Or anything else, for that matter.
  • ...to make Dunder Mifflin your sole supplier of office goods.
  • by Jackie_Chan_Fan (730745) on Tuesday March 17, 2009 @06:28AM (#27223169)

    Why am i not shocked?

    I'm growing to hate money and all who seek it at the cost of being fair, honest, and humane. Greed is a disgusting thing.

    I'm all for public hangings of guilty CEO and politicians.

  • by apharmdq (219181) on Tuesday March 17, 2009 @06:31AM (#27223179)

    I work at Office Depot currently, and I can assure you this is not standard practice where I work, and certainly wouldn't be allowed by any of the managers or corporate. With regards to the issue about people lying about laptops being out of stock, yes, there were some salespeople who were doing that. As soon as it was found out, the practice was halted and everyone was informed that under no circumstances was it to be allowed. (And logically, even selling a laptop without the extended warranty is better than not selling it at all.) I so know that if any of this happened at the place I work, the employee responsible would be fired with no hesitation.

    It is true that Office Depot does tend to push for these warranties, add-ons, etc, but you'll find that just about every other store, from Best Buy to Fry's does the same. Like it or not, that's how the business is run.
    As a customer, it's annoying, but you just have to put up with it and move on in life, just as you put up with club cards, coupons, mailers, and all the other little annoyances that just about every store dumps on you these days.
    As an employee, it can be stressful, but it's unlikely that you'll get fired if you don't contribute to the "quota." (And remember, this is retail. Working in retail sucks in general.)

    And just as a final word, I'm not a manager, or corporate, or any higher up at OD. I'm just a lowly employee working there to pay for my textbooks because the hours are flexible enough to accommodate for my classes. I don't particularly have much company loyalty, but it does tick me off that people are spreading what is essentially tabloid journalism without giving any thought as to whether it's a widespread practice, or just some individuals who are giving the company a poor image.

  • Belkin.
    Dell.
    Office Depot.

    Just one more company on my short, but growing, list of companies I just won't deal with at all, ever, because of some galactically stupid screw-the-customer policy.

  • Some years ago, I saw a printed ad for some Kingston RAM for sale, pretty cheap too, so of course I stop by the store and ask for that specific model. The sales guy puts a package with generic RAM in front of me, and asks for the 20$ higher regular price on that one. "That's not what's in the ad, or what I asked for at all." I said, to which he replied "That's what you're going to buy." I sneered at him and never stepped in that store again. In a way, I'm grateful he acted that way because as a result of hi

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