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How Office Depot Pushes Service Plans On Customers 417

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

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  • Depot dumbness (Score:5, Informative)

    by pilgrim23 (716938) on Wednesday March 11, 2009 @06:49PM (#27158651)
    I bought a keyboard yesterday. I was asked if I wanted a warranty. I said "On a keyboard?" with a sardonic sound. It went right over her head. Then she put a tape over the edge of the box "Whats that?" I asked "our return policy" she said. "So if I break the tape I cannot return it? You do realize I need to open the box." " I'm sorry sir, that is the policy" she smartly replied. I left with my wallet, but not wits intact...
  • by mackinaw_apx (1444371) on Wednesday March 11, 2009 @06:53PM (#27158691)
    I used to work for Office Max for over a year. These exact same employee "policies" were in place there too.. though our plans were called "Max Advantage". We'd be told to only help customers on the floor that were looking at or thinking of purchasing items that carried a service plan... and got "write ups" if we didn't sell X amt. of plans per month. And since the day I quit, I haven't worked retail again...
  • Re:Better Question (Score:3, Informative)

    by moniker127 (1290002) on Wednesday March 11, 2009 @06:59PM (#27158793)
    Id still say the same thing about best buy.
  • Re:Depot dumbness (Score:1, Informative)

    by Anonymous Coward on Wednesday March 11, 2009 @07:00PM (#27158811)

    In the UK it helps if you know the trading laws. That won't prevent a cashier calling in help from the manager to try and BS you, but they do tend to recognise someone who knows what he's talking about.

    Talking of laws, there is also a way to reverse the situation and take advantage of a shop. In the UK, credit agreements have a legal 30 day "change your mind" cooling off period, and if you return the goods (in decent state, of course), the shop has to roll back the credit as if it never happened (read: no charges apply). This means you could get yourself a free 30 day loan of a decent camera for whatever event you're trying to shoot, just make sure you buy it on credit - even if you have the cash..

  • by Xaximus (1361711) on Wednesday March 11, 2009 @07:02PM (#27158849)
    Why would anybody be appalled and angry at a store for trying to upsell a customer? That's business, and there's nothing inherently wrong about it. A store has no duty, legally or morally, to inform a customer as to whether or not a purchase is a "good deal." If you don't want to buy the extended warranty, then don't. Of course, I'm not talking about dishonesty here. If someone lies to you about what you're buying, that's a different matter completely.
  • by Aladrin (926209) on Wednesday March 11, 2009 @07:06PM (#27158911)

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

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

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

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

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

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

  • Certainly not new (Score:4, Informative)

    by mschuyler (197441) on Wednesday March 11, 2009 @07:11PM (#27158995) Homepage Journal

    Selling up is hardly new with computer stores. Long time ago I bought a high-end VCR (Yup, THAT long ago) from a Silo store I had frequented. They always tried to sell the warranty, and this time I was damn sure I wasn't going to buy one. The sales lady rung up the order without asking, so I sarcastically asked, "Aren't you going to try to sell me one of those extended warranties?" "No," she said. "I can see it in your face that you aren't going to buy one." which I thought was pretty funny.

    About the scripts: I worked retail for awhile and I gotta tell you, some of these 'sales associates' are so afraid of what to say that they demand scripts. They'll say, "What do I say?" so I'd say, 'Just talk to the customer and answer his questions.' "But what, exactly, am I supposed to say?" and it just goes on and on until you write them up a script to keep them quiet. This was especially true for customer complaints where no one wants to say the 'wrong' thing. As you know, once in awhile a customer can be kind of unreasonable, and there's this old aphorism that "the customer is always right." But as far as I'm concerned, that doesn't mean a front-line flak catcher has to take abuse. What the phrase means is, "The customer knows what he wants to buy, and if you don't have it, you screwed up." It doesn't mean if he starts yelling at tou that you have to stand there and just take it. Leave. get a manager. Whatever.

  • by slummy (887268) <shawnuthNO@SPAMgmail.com> on Wednesday March 11, 2009 @07:11PM (#27159005) Homepage
    When I was 17 I worked for Office Max.

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

    by Anonymous Coward on Wednesday March 11, 2009 @07:16PM (#27159069)

    office depot isnt the only place that pushes these.... i lost my job at k-mart years ago for openly opposing them (though the termination notice was full of lies about poor service).

    at the time the statistics said only 5% of the smart plans were ever used, and nearly 100% of those used were within the time period when you could still return the product to the store, or get it repaired/replaced by the manufacturer. plus the service was provided by a third party, with a call center located in india. so they were difficult to deal with and k-mart had no liability.

    from what i see of the marketplace now, the only time a service plan might be worth it is while perchasing $1000 plus products with service plans that only start AFTER the store and manufacturing warranty plans end... or provide crazy handy services, like pick up and delivery service during purchase/repair, and move-it-fr-you services when you move for the durration of the warranty (if you move a lot).

    other than that in store plans mearly pad big corp's pockets and encourage the whole generations selling them to rely on lies and deceit to maintain basic employment; and just basic employment, since few companies share their profits with their employees.

  • by CannonballHead (842625) on Wednesday March 11, 2009 @07:45PM (#27159471)

    *sigh* -1 ruined joke. what I meant to say is ...

    How do I make a clam?

    Get a mother clam, a father clam, and put them in a clamhouse.

  • by garett_spencley (193892) on Wednesday March 11, 2009 @07:48PM (#27159517) Journal

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

    Oh please. Everything up until that paragraph I would buy as plausible. But do you know WHY they pay their employees so little ? Because people are willing to take the jobs at those wages. Do you know why they only have 2 cashiers working ? Because people are willing to wait in line a little longer to pay cheaper prices (otherwise Walmart would not be in business, let alone so huge).

    Do you know why the employer wants to pay as little for labour as possible ? Because labour is an operational cost, just like leasing office space, buying equipment and paying for advertising etc. EVERYONE, whether you're a business owner or not, always wants to sell high and buy low. That's not greed. It's common sense. However, what people really don't get about it is that by keeping operational costs down, the prices get kept down. So while people's wages may be lower, their costs of living is also lower. Raise the wages, raise the prices. We all make more money but not really because everything costs more.

    As for managers, managers are not entrepreneurs. They are hired by the owners to oversee departments and divisions. Their wages are just as much an operational cost as any other employee's. Now, sure, of course they will do what they can to get a higher pay for doing less work, just like any employee will. But in the end the entrepreneur needs to keep ALL costs down in order to compete with other businesses. You know, to stay in business.

    So if the owners are paying the managers ridiculously large wages while the people actually doing the "real work" are getting cheated then the entrepreneur will not be in business very long. It will only take ONE company to pay his manager just a little less (since apparently there's so much of an inflated salary to cut into right there), and pay his employees better (he'll take all the good employees and undermine his competitors on service) and presto, he's got the market share.

  • Re:Wow (Score:1, Informative)

    by dabbaking (843108) on Wednesday March 11, 2009 @07:49PM (#27159545) Homepage
    Like I said in my earlier comment, it's one bad apple most likely. Getting PIP'd is an inside joke and it doesn't really mean much. I honestly care that people get the right stuff when they walk out. Like when someone gets a printer (not networked), I ask if they need a cable. It's not that I want to raise out Market Basket, it's that I don't want them coming back pissed wondering why it wasn't working (they didn't know to get the cable). Any replacement plan or repair plan for any store preys on people's distrust of the technology. It's also pretty much pure profit for the company. If they didn't make enough doing it, they wouldn't do it, but it's too lucrative.
  • by Anonymous Coward on Wednesday March 11, 2009 @07:59PM (#27159659)

    Future Shop and Best Buy also offer a service like this, something along the lines of if what you bought can be found cheaper somewhere else for 30 days after you buy it you can get a refund for the difference. The only requirement was that you had to have a copy of the ad showing the lower price.

  • Re:Better Question (Score:4, Informative)

    by cob666 (656740) on Wednesday March 11, 2009 @08:17PM (#27159885) Homepage
    I recently purchased an HP laptop at Best Buy that ended up being a few dollars cheaper than what it would have cost to buy direct from HP once you added in the shipping costs and the sales tax.
  • by Joe The Dragon (967727) on Wednesday March 11, 2009 @08:57PM (#27160379)

    read this for the real stormy on car sales men
    http://www.edmunds.com/advice/buying/articles/42962/article.html [edmunds.com]

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

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

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

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

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

    Warren Buffett warned about bank failures in 2003 [bbc.co.uk]. It was certainly no secret; anyone with any interest in financial business knew about the problem. Bank executives knew that what they were doing would be the end of their companies. I suppose they were making so much money (sometimes $40 million per year) that they didn't feel it was necessary to care. It was understood, and often discussed even on TV, that the U.S. taxpayer would pay for any problems that were created; that is happening exactly the way it was planned.
  • I can top that... (Score:5, Informative)

    by TiggertheMad (556308) on Wednesday March 11, 2009 @09:36PM (#27160761) Homepage Journal
    I worked at ChimpUSA in college (same shit, different company), and once of my co-workers with less than stellar morals managed to sell some lady a 1 year warranty on printer ink.

    When the boss found out, he yelled at the guy, not for being a total slimeball, but because the woman could have probably come back and got free replacements for her 'defective' (re:empty) ink cartridges for the next year...
  • by shutdown -p now (807394) on Wednesday March 11, 2009 @09:47PM (#27160875) Journal

    I hope they answered "yes", because it is.

    "Downloading music" is certainly not a crime. Violating someone's copyright is, but it's not something that's inherent in downloading. For example, you can download these songs [tds.net] absolutely legally, and there are plenty more.

  • Re:Better Question (Score:3, Informative)

    by Lumpy (12016) on Wednesday March 11, 2009 @09:56PM (#27160997) Homepage

    Same reason I bought my new dell laptop at Staples..

    it was $350.00 cheaper than I could get the exact same thing with my partner pricing from dell.com.

    I saved a crapload of cash and got it right now instead of waiting a week and paying for shipping.

    for some reason these office supply stores have insane deals that the manufacturers cant touch. Funny part is that I was able to buy a dell extended warranty for it when I got to work at dell.com for 1/2 the price of their special staples care package.

  • by hansamurai (907719) <hansamurai@gmail.com> on Wednesday March 11, 2009 @10:36PM (#27161301) Homepage Journal

    Yep, did the same at Staples during high school. I remember one particular Sunday morning where I had sold a bunch of plans by noon, basically tripling my pay check for those sorry few hours, "$19 an hour! WOW!"

    I don't regret selling the plans, some of them were nice, like the laptop screen repair. I never followed scripts, you can read people pretty easily after a while of selling electronics, I don't think I bothered asking even 50% of the time. I was only a top seller like once, but it didn't bother me.

    Just remember most of these salespeople are just kids doing their job. If you don't want it, just say no. If they keep bothering you about it, just vote with your wallet and walk out.

  • by paulgrant (592593) on Wednesday March 11, 2009 @10:45PM (#27161383)

    thats nice in theory but....

    managers get paid more 'cause we're the one's who a)give a shit about performance and b)capable of dealing with the unexpected crap that arises during the course of business.
    the lack of business sense (or worse, common sense) is so appalling at the minimum wage level I'ld rather just automate rather than deal with the stupidity.

    and in case u want (dis)proof ;) witness all those lovely mining/meatprocessing plants with safety records from the 1800's paying crap wages.... occasionally a crappy job
    is better than no job.

  • by tnok85 (1434319) on Thursday March 12, 2009 @02:10AM (#27162831)

    Back in high school, I worked at a Media Play. It was a chain similar to Best Buy and Circuit City, but it had a massive book section alongside video games, software, music, and movies.

    I worked in the video games/software section as a sales associate. Unfortunately, they didn't pay us commissions, but they sure as hell threatened us with losing our jobs if we didn't meet quotas.

    Let me list out what we had to push on customers:

    - "Free" issue of some general entertainment magazine (That would automatically charge your card if you didn't cancel in a week)
    - "Free" issue of some movie magazine (That would automatically charge your card if you didn't cancel in a week)
    - Dish TV subscription. (Yes, they wanted 16 year old 'associates' pushing a new TV form. Needless to say, only one person EVER sold one, and that was a manager)
    - Media Play Rewards Card (The only semi-reasonable thing, low signup fee and money back - worth it if you spent more than a hundred dollars a year there)
    - A Discover credit card... what the hell?

    These were required to be pushed on EVERY CUSTOMER we saw, regardless of if they were walking to another section or not. I felt worst for the people heading towards the book section, as they had to pass through two other sections and were accosted at least once or twice before even reaching the book section.

    This was only required if the customer was buying something electronic: (Gameboy, XBox, Playstation, etc)

    - Extended Warranty Plan

    We were told to lie about this, saying it was 100% coverage no matter what happened. Needless to say, 16 year old employees do not care to read a 10 page document of fine print to find this out. Not to mention that the store was on the way to being closed down (and they knew it) so these 3 year warranties wouldn't be honored anyway.

    I never sold a single 'extra', even going so far as to tell people directly that these 'deals' were scams (except for the Media Play Rewards card, but I told them it'd be easier to just ask the cashier about it if they were interested) but I kept my job because I got a half dozen reports to my manager from customers about what a great employee I was. ;) I still got bitched at, but I kept my job.

    And this is a situation where there's no commission.. ;)

  • Just as a note, while Odland is a dick, and there's a good chunk of OD employees who disapprove of him, the company itself consistently wins customer service awards - apparently, the "Stevie" (whatever the hell THAT is) was won this year by the company.

    This is an isolated and overblown incident - and if someone at my store pulled this stunt, they'd be fired - right before I punched them in the face (If they're no longer employed, it's just simple assault, right? ;) (bonus points - I'm not a manager, just management-ready) We actually -do- value our customers, especially in our store where we get plenty of regular ones.

    That being said - we -are- encouraged to sell PPPs at our store, and they -do- get touchy if we don't. Also though, experience counts. I bought a $300 chair with one of the PPPs, using my tax rebate money last year. The back snapped off it near the beginning of this year - called 'em up, got my money back for it. I'll grant, it comes back on a gift card, but it can be used for pretty much anything you want in-store short of another gift card. ;p

    And yes, as far as the stores are concerned, the PPP is damned near pure profit. On the other hand, like I said - perhaps I've had a dose of the kool-aid, but not having to spend another crapload of money (especially when I'm making retail money) on something gives one a different perspective on the things.

    Assclowns like the employee mentioned in the original article? They're just trying to draw a paycheck and keep a job in this economy. The ones who actually believe in the plans are the ones who are A: not pushy, and B: successful. ... I rambled. Sorry. _

  • by commodore64_love (1445365) on Thursday March 12, 2009 @08:27AM (#27164965) Journal

    P.S.

    What really annoyed me about Sears is, if you don't sell their extended warranties, they take you off the floor & make you sit in the break room watching videos. All day. You can't earn a commission if they force you off the floor. I can't believe such tactics are legal.

  • by abroadst (541007) on Thursday March 12, 2009 @10:57AM (#27167023)
    16 years ago when I worked for Circuit City they had a similar procedure. Sales counselors (as we were called) weren't explicitly instructed to deny the product to customers who didn't want the "cheese" (aka extended service plan or ESP) - but we too were subject to management scolding and eventual firing if we didn't meet our quotas. So there was a significant incentive to tell customers who didn't want the ESP, especially on a promotional item with a low spiff (aka commission) that they should either buy something else or maybe wait around awhile while the sales person ignores you until you leave. From the sales person's perspective, why bother selling a laptop that pays the sales person a dollar or 2 (if it's on sale) and reduces his or her ESP percentage? The only way out is to lie about stock, sell lots of overpriced accessories, or upsell to a higher margin unit with a higher spiff.

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