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Best Buy's Bad Business

Posted by Steven Burke on Jul 29, 2009 6:39:19 PM

Best Buy made its name by selling technology products at the lowest possible price.Of course the best prices don't always mean the best service. In fact, there is no free lunch in life. You usually get what you pay for.

 

To that point, Best Buy has always had trouble providing technology services to consumers, businesses or any class of customers.

 

Now that technology product sales have plummeted, though, the company is making a big push on services. In fact, Best Buy's new CEO Brian Dunn sees services as the future for the company.

 

In the most recent quarter, Best Buy's comparable domestic store sales were down 4.9 percent due to what the retailer called a decline in customer traffic. Interestingly enough, the sales decline was partially offset by what Best Buy called gains in notebook computers, mobile phones and repair services.

 

So are Best Buy's Geek Squad techs being pressured into making repairs that are flat out just not necessary? It's a question worth asking given the experience of one of our senior editors Scott Campbell and a number of other consumers complaining about the Geek Squad.

 

To get the full impact of Best Buy's services shortcoming check out this blog post by Campbell. For those that don't want to digest the full Campbell saga let me summarize: Campbell's wife earlier this year bought him a Dell laptop and purchased the Best Buy three year "Black Tie Protection" warranty. How much margin, by the way, does Best Buy make on this Black Tie Protection warranty plan? My bet is it's a lot more margin than they are making on the Dell laptop.

 

The Black Tie black eye for Campbell came after only a few months when the hinge on his Dell laptop came loose. How many of these low priced Dell laptops are coming unhinged?  My bet is there are a lot more Dell laptops being repaired than HP laptops.

 

Campbell brings his Dell laptop back to Best Buy which agrees to ship it out and return it to him in three weeks. How in the world can you justify a  warranty that does not provide a one or two day turnaround in this day and age? Three weeks. Are you kidding me?  What exactly are you paying for if you can't get a repair done in 48 hours?

 

We've already proven that Best Buy's Black Tie warranty isn't exactly a barn burner. Then Best Buy's Geek Squad replaces the hard drive without so much as even a heads up to Mr. Campbell. Then Mr. Campbell gets a phone call from another Geek Squad rocket scientist asking if he wants to buy data recovery services from Best Buy?

 

Do you see a pattern here? Does this sound like an advertisement for a local computer store, system builder, reseller or solution provider? You bet it does. There is no way that any local solution provider could provide this kind of service and last more than a month.

 

Mr. Dunn and Best Buy really need to do some soul searching and implement some best practices from its warranty services offerings to its Geek Squad policies regarding making repairs that have not been approved by a customer.  From this vantage point it looks like there is a lot more bad business than best buys going on at Best Buy.

 

Best Buy, of course, won't answer any questions from Mr. Campbell. My question for local resellers and solution providers out there is: Are you seeing MORE customers knocking on your door in the wake of a bad Best Buy experience? And for technology consumers: What kind of BEST BUY experience have you had with the retailer's  warranty offerings and its Geek Squad service?

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Jul 29, 2009 8:13 PM TechShopper32 TechShopper32    says:

Contrary to popular belief, services are not an evil plot thought up by retailers to steal consumers' money and screw them over. Yes, there is high margin on services, but that is a big part of how electronics retailers stay in business. If consumers want a store where they can choose from a wide selection of gadgets and also have the option to purchase some sort of protection (beyond what is briefly covered by the manufacturer) then they must accept the fact that services are a means of keeping such stores in business. As annoying as it may seem, if you want to be able to shop at these places, they have to make money somehow. Surprisingly the stores don't get to decide how much money they're going to make off of the products they sell.

 

I understand how frustrating it is for one to be without his or her computer for weeks at a time, but doesn't it seem a bit unrealistic to expect Geek Squad to service and return a computer in a matter of days? Especially considering the volume of computers that are brought in? What can be done in store is done in store, but the "Geeks" are not magicians who can magically fix anything with the resources on hand, nor do they have the means to solve all problems.

 

If your computer had a virus and if removing/fixing that problem meant potentially losing your valuable data, wouldn't you want your information to be backed up? I can't help but notice that your incredible bias in this situation is painting every interaction with the Geek Squad as that same evil plot to steal money from customers. You said it yourself: you get what you pay for.

 

Computers, just like most other forms of technology, just aren't made the way they used to be. Again, surprisingly, the retailers you shop with do not manufacture the products they sell. A company that offers any type of service to its customers (no matter how long it takes for that service to be performed) is in most cases offering a serious benefit in that the product is covered for a longer period of time, it covers more issues, and there is an actual human being to interact with and ask questions.

 

So, in answer to your question of "What are you paying for?", you are paying for continued use of your product without having to pay to replace it. If you can afford to buy a new computer (iPod, TV, washing machine, etc...) when it breaks then by all means do not purchase service plans. However, if this is something you cannot afford to do, then consider the fact that the  retailer you shop with is doing its best as a profitable company to offer you a solution for the products that it sells but does not manufacture.

Jul 30, 2009 10:13 AM MKTGVAR MKTGVAR    says in response to TechShopper32:

It's all about service, service and service. If BB makes a decent margin on their new plan to service and repair computers, then reinvest the profit and hire on-site technicians to get the product out the door in 48 hours. That's what the people want: service NOW! And that is a big competitive differentiator.

Jul 30, 2009 11:49 AM TechShopper32 TechShopper32    says in response to MKTGVAR:

I absolutely agree. Along with services must come excellent customer service. Unfortunately in such a massive company there are bound to be instances where customers are unhappy, but that does not mean that the company is not constantly taking strides to better the customer experience.

 

Aren't we becoming a bit impatient? We depend on these gadgets to run our lives and most of us are not capable of fixing them ourselves, so it's pretty valuable to be able to send them away to someone who can. That's why the option exists in the first place.

 

It would be nice if everything we wanted could be finished when we wanted it to be, but it would take more than a significant "investment" to have the on-site capabilities to perform all of the services necessary to fix the machines. That margin that companies make on services is what helps them to pay their employees and keep their doors open, so it's not exactly a big source of income that's being frivolously wasted. It's so easy to throw a fit when things don't go the way we want them to, but we have to take a step back and look at the big picture. Companies need to make their customers happy, no question, but there has to be a cost-effective balance.

Jul 31, 2009 9:30 AM Gunner_Don Gunner_Don    says in response to TechShopper32:

You're killing me!

A service you're paying extra for should actually be worthwhile. In THIS case, the hinge actually failed 6 months later - still within the manufacturer's warranty. So I'm guessing the "Black Tie" part hadn't kicked in yet meaning at this point, it's up to Dell to fix the problem. Which in THEORY could be 3 weeks. However, depending on the model BB could have called Dell and had them ship the part to BB for replacement (my bet is it was a loose screw in the hings mount - it takes a LOT longer than 6 months to "wear out" a hinge).

You state: "I understand how frustrating it is for one to be without his or her computer for weeks at a time, but doesn't it seem a bit unrealistic to expect Geek Squad to service and return a computer in a matter of days? Especially considering the volume of computers that are brought in? What can be done in store is done in store, but the "Geeks" are not magicians who can magically fix anything with the resources on hand, nor do they have the means to solve all problems."

ASSUMING the "Black Tie" part of the warranty has kicked in, that SHOULD be what you're paying for: expedited repairs (have never seen the fine print). It is NOT unrealistic to expect a repair to be done in a few days. If a "shop" (if BB could be called that) cannot turn around jobs quickly enough, they need to hire enough help to make it so. It is my policy to turn around repairs within 48 hours under normal circumstances.

You also state: "If your computer had a virus and if removing/fixing that problem meant potentially losing your valuable data, wouldn't you want your information to be backed up? I can't help but notice that your incredible bias in this situation is painting every interaction with the Geek Squad as that same evil plot to steal money from customers. You said it yourself: you get what you pay for."

First of all I will absolutely agree that the customer should be responsible for a backup of their own data. HOWEVER, it is professional courtesy (and should be common sense) to NEVER erase a hard drive without direct contact with the customer. They need to at least be aware of it. That said, I have NEVER come across a virus that required formatting a hard without the ability to backup data myself. In my shop we NEVER format a drive without either backing up data, or contacting a customer and letting them decide. It takes, what, 5 minutes MAYBE to talk to them? And if you can't get ahold of them, set the machine aside until they answer and work on the next one. NEXT, I would say that first off: you don't REPLACE a drive over a virus, and finally that even if it HAD a virus, BB wouldn't cover it under warranty and therefore shouldn't have replaced it.


You state: "A company that offers any type of service to its customers (no matter how long it takes for that service to be performed) is in most cases offering a serious benefit in that the product is covered for a longer period of time, it covers more issues, and there is an actual human being to interact with and ask questions."

My theory on extended warranties is that they normally have to be "hit" twice - the first time will usually pay for the warranty, but to make the gamble worth it, you need to have a second warranty service before you actually made it worth it.  And I can assure you from my customer's experiences that there is not "actual human being to interact with" regarding BB's extended warranty service.  I even had a customer who paid $99 for a "one year extended warranty" on his new HP laptop - that $99 covered the EXACT SAME time period as the manufacturer's warranty. And when his hard drive died, BB told him it was a software issue and refused to help him. He brought it to me and I had HP ship me a drive and I restored his system. But it wasn't free.

 

I have been able to build a business partially because of the ineptitude of Best Buy and few other of my competitors - largely over data loss. It is my policy that even when a work SAYS to erase the hard drive, I call the customer ANYWAY to confirm with them exactly what that means. Many are unaware that Word didn't really come with Windows.

 

... Sorry for the long rant - this topic really got under my skin. I've had over a dozen customers come crawling into my shop, crying (LITERALLY crying) because someone else wiped out their hard drive and never told them... LOTS of war stories over that.

Jul 31, 2009 9:34 AM Gunner_Don Gunner_Don    says:

Another thing I wonder about this: if the drive was "faulty" and "replaced under warranty", shouldn't it have been returned to Dell? The machine was STILL under Dell's warranty. How, then, can BB offer to recover data? Why do they even still HAVE that drive? Or... did they back it up, ship it off to Dell, then offer to "restore" this data later? If THAT's what happened, why couldn't they have just restored it anyway?

Anytime I've ever replaced anything under Dell's warranty plan (they will ship me parts to replace even though I'm not a "service center") they have required immediate return of the failed part - especially true with hard drives.

Hmmmmmm.... makes you wonder....

Aug 2, 2009 10:48 PM ndg2006 ndg2006    says:

This article is quite amatuer to be honest.  The blog is based in a manner of don't try and talk bad.  As an owner of 'Black Tie Protection' I can tell you many facts:

 

#1, it's not an extended warranty, if it was, why did I receive a terms and conditions brochure stating that there is no deductible and that I would be covered for many more things than a manufacturers warranty.

 

#2, on my HP notebook that is covered under "Black Tie Protection", I have had 3 claims taken on the laptop.  The first was an overheating issue.  The store I frequent is VERY large and serves around 400,000 local residents alone.  Unfortunately, the laptop service center abided by their protocol and did nothing to fix my problem.  The explanation was completely understandable: "The service center can't run video games due to copyrights and corporate licensing agreements."  My overheating was caused by a game, which a service center cannot run without the licensing to do so.  Sure, a local shop can do this because it's easier to bend the rules when you aren't looked at by many agencies verifying that you are following corporate licensing agreements, yet we are talking a fortune 500 company, not to mention the second largest retailer in the world.  After the statement, the 'Senior' of Geek Squad had them use an approved tool to overheat the computer known as Prime95, a benchmark utility that they do have corporate licensing for.  A week later, I had a replaced fan and heatsink, no shipping fees, no diagnostic fees, everything taken care of.  Call me crazy, but that doesn't seem like what I would get by sending it to HP.  Hell, I probably would have to talk to a complete moron about what my computer was doing, and I highly doubt that I would have gotten a favorable response considering the last time I talked to a computer company about a problem with THEIR product and THEIR warranty, I got this response: "Well, since your wireless card DOES work, we can't do anything for you", yet I would get abysmal speeds doing anything (we're talking 100 kbps download on a 10 mbps connection).  My second claim was my power adapter.  The capacitor failed on the adapter, which caused the computer to no longer charge.  I brought my computer in, they gave me the corporate office number, I was on the phone for 10 minutes, they submitted the claim to HP themselves, and shipped it directly to me, free of charge.  Sounds SO terrible!!!  I didn't have to call an automated menu, talk to a level 1 tech that doesn't know anything but what the prompt reads to him/her and get through the corporate HP bullcrap just to get a replacement charger.  It was done for me, and it took 4 days to get.  My final claim was dropping the computer on accident.  Luckily for me, the $200 I laid down in addition to the laptop covers accidental damage, including the screen that broke on my computer.  I submitted this claim on 7/30, and I expect an update in the next few days as they received the computer the 31st.  Somehow I figure that HP wouldn't have covered this under A) their warranty, or B) an extended warranty.  I also don't think a local repair shop would get the job done any faster considering they don't offer a plan like this.  Gosh, what a bad deal I got, they must have made a fortune off of my $200 yet it has saved me over $250 (a replacement HP power cord is $89.99, google it yourself--replacing the heatsink and fan would cost at least $150 from a local shop).

 

Now to my second point, which is towards the author, gunner, and MTV.  Have you purchased a plan?  Or are you like my father who never purchases those 'darned scams'.  Too bad I didn't have to swipe my credit card when his sound card failed, or when the volume knob on his computer fell into the board.  Most shoppers think the less they spend up front, the better off they are, and I have a handful of friends and myself to prove that it's not the case which has brought me to an important fact of life: Buy to make yourself happy, not to suffice.  If you buy to get by, which is just buying a computer, no protection, no service, no nothing, then you are setting yourself up for disappoinment.  The problem is, you have people like the author that will rally an army together to say anything they can negative about a company that actually is trying to do the right thing, which is offer what other companies don't, and if they do, they are more expensive (the HP accidental plan for my notebook was $100 more than what best buy offered me).

 

Finally, I will make a point that many people overlook.  A fortune 500 business will always have their naysayers, and that is justified.  What is not justified, is for people to make problems bigger than they are.  One customer had to wait 3 weeks to get a hinge repaired.  What could have happened?

 

Scenario 1:

That particular hinge for that particular laptop (whether it be Inspiron, XPS, Studio) may have been backordered.  This would explain the wait time.

 

Scenario 2:

A massive influx of repairs may have caused a back-up at service centers.

 

Scenario 3:

Best Buy is lazy.

 

So let's take a look at those 3 scenarios.  All could be true, but which is most likely.  Have any of you had to wait an extra day for a product that was lost, or backordered?  I have, many times.  Have you not been able to get an oil change because they were booked when you came in?  I have, many times.  Seems like scenario 1 and 2 are much more likely than scenario 3.  And about the hard drive?  Mistakes happen.  I have made many mistakes repairing friends computers, and I can tell you that it happens, and when it does, you have to rely on yourself to fix it.  Best Buy's problem is lawsuits and people that blow things out of proportions.  They can no longer treat every customer equally because some people want the rules broken for them, some people abuse policies, and some people lie to gain for themselves.  It's sad that the world has come to this, but you won't see my family stop shopping at a store that employees 80+ college kids and middle aged males and females, not to mention give back to the community (google @15).  These stores exist for a reason, just as many other small businesses do, and that's because we have the freedom to choose.

Aug 4, 2009 5:43 PM TTran TTran    says:

My family and I are the among of Best Buy victims in electronic product warranty and gift card as well.  It were in similar case in computer, digital camera.

 

My daughters are 8 and 10 years of age got their $500 gift card from their aunt in Houston last Christmas (and we are from Austin).  I was with my sister-in-law when she purchased the $500 gift card and we were plan to get the girls once we back to Austin after the holidays.  Almost 8 months later we use the card at Best Buy and they show the card ONLY have $30 (instead of $500), after talking to the store manager and they recommended us to contact American Express since they make and provide the gift card service to Best Buy.  The case never get any where by point finger at each others, and the bottom line is...we crewed (i even still have the receipt).  I can not disagree more with other victim out there.  I QUIT visit or buying anything at Best Buy.  I wish that they will no longer doing business and more people will read all these messages and take precaution for them self.  May be one day, they are all out of job and hope other retail out there will take precaution to screen their new from Best Buy.  They are such as "Rip off, unprofessional, under knowledge in technology, etc..."

Aug 9, 2009 11:56 PM dysmanle dysmanle    says in response to TTran:

Best Buy and GeekSquad 99% of the time cannot do laptop repairs on site.

 

1. they do not carry laptop components. (there is how many models?)

2. the techs arent certified to work on the laptop without voiding the warranty

3. have them do a motherboard replacement for you - heck even on a desktop and see how much

they cost to "backup or preserve your data". Most local shops will court you in this area because they

specialize in dealing with people. Not only that they are usually HALF the cost of geeksquad.

4. Ask the technician WHO will be working on your laptop and how long have they been an employee at best buy "DOING" repairs. Not selling TV's.

 

Another issue that should be looked at is this, They have to ship everything out because the untrained / uncertified / unprofessional technicians. If they were able to do these types of repairs their insurance premium would skyrocket and the services would cost EVEN more then they already do.

 

Go local - most have been around for a long time.