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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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  • Better Question (Score:5, Insightful)

    by moniker127 (1290002) on Wednesday March 11, 2009 @05:41PM (#27158515)
    Why would you buy a computer at office depot?
  • by Ethanol-fueled (1125189) * on Wednesday March 11, 2009 @05:45PM (#27158579) Homepage Journal
    Heh, that sounds about right.

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

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

    My biggest mistake in that job was mentioning the word "ethics" to my manager. I was never promoted ^_^
  • Appalled? (Score:5, Insightful)

    by phantomfive (622387) on Wednesday March 11, 2009 @05:46PM (#27158587) Journal
    Wow, if you get appalled over scripts for cashiers, wait until you find out about telemarketers, what THEY have. I fear the day you learn about politician's speech writers. Oh, and did you know? Those bills that get passed through congress, often the congresspeople DON'T EVEN READ THEM.

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

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

    Man, I must be feeling bitter today.
  • the slide shown (Score:3, Insightful)

    by bugs2squash (1132591) on Wednesday March 11, 2009 @05:47PM (#27158609)
    did not look that bad to me. It seemed to stick to the facts. They are supposed to make money
  • Re:Better Question (Score:5, Insightful)

    by IANAAC (692242) on Wednesday March 11, 2009 @05:49PM (#27158635)

    Why would you buy a computer at office depot?

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

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

  • The Script.. (Score:5, Insightful)

    by $1uck (710826) on Wednesday March 11, 2009 @05:52PM (#27158679)
    "This _____ is eligible for our replacement plan. I recommend it because if the product fails after the manufacturer's warranty, it will be replaced with an Office Depot Merchandise card for the full price you are paying today."
    If this shocks, amazes, or angers you. Get a fucking life. How is this news at all? If they want to lose a sale b/c they're not selling a protection plan, well I would think they are just shooting themselves in the foot.
  • by PCM2 (4486) on Wednesday March 11, 2009 @06:01PM (#27158815) Homepage

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

    Actually, I think it's more likely that the [RI|MP]AA paid to advertise at Best Buy, the same way that technology companies can buy end-of-aisle display placement. When the money ran out, the ads came down.

  • Here is what I do (Score:5, Insightful)

    by bogaboga (793279) on Wednesday March 11, 2009 @06:07PM (#27158919)

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

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

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

  • by Jurily (900488) <jurily@@@gmail...com> on Wednesday March 11, 2009 @06:13PM (#27159033)

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

    Heh. I actually used the sentence "If you want to be ripped off that badly, I can get a colleague for you, but I won't sell you this" once. I was supposed to sell phone plans and horribly crappy and overpriced ADSL connections together. The phone part was good though.

    I worked a total of four days there.

  • by vux984 (928602) on Wednesday March 11, 2009 @06:22PM (#27159147)

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

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

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

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

  • Scam (Score:3, Insightful)

    by interval1066 (668936) on Wednesday March 11, 2009 @06:23PM (#27159159) Homepage Journal
    Just another scam. Why go through the hassle? I just bought a netbook for my wife from Amazon. Has as low a price as I could find for that particular product, no hassle, no muss, no fuss. The only hassle I can see is that I can't walk out of their establishment with my purchase that day. But I didn't have a sales clown in my face telling what I need, getting in my way, forcing me to smell his BO, etc... For this kind of service I can wait.
  • by icannotthinkofaname (1480543) on Wednesday March 11, 2009 @06:35PM (#27159315) Journal

    Am I sorry they're out of business?

    I dunno. Not really.

    Good. You shouldn't be sorry. It's not your fault they're finished. It's everyone who didn't buy their computers from Circuit City, thereby denying Circuit City a profit from the consumer's money.

  • Re:Depot dumbness (Score:4, Insightful)

    by garett_spencley (193892) on Wednesday March 11, 2009 @07:01PM (#27159681) Journal

    Meanwhile everyone has a higher cost of living because stores need to account for the higher costs of complying with such regulations (being out perfectly good inventory that comes back damaged, having to pay more for labour to deal with accepting returns and the turn-around etc.) which goes straight on to the prices.

    If the majority thinks that the cost is worth it, then it doesn't matter. They're getting something for it. People just need to realize that those types of regulations don't purely help consumers and hurt businesses. They have a cost associated that everyone has to bear.

    On the flip side, without those regulations you can always turn around and resell a product that you realize that you don't want. You might still take a loss, but then, you went out and bought a product you didn't really want. Personally I'd rather people who buy products that they don't want take the loss instead of everyone.

  • Office Despot (Score:5, Insightful)

    by tverbeek (457094) on Wednesday March 11, 2009 @07:22PM (#27159965) Homepage
    I've avoided buying anything at Office Despot since I walked into one years ago and they had a sign boasting that they test their employees for drugs. Even aside from the fact that I find that invasion of employees' privacy troublesome on principle, why would I - as a customer - care whether the guy ringing up my sale smokes a little weed once in a while, or even if the girl restocking the shelves does a line of coke every night? What kind of business brags about how worker-unfriendly an employer they are?
  • by ENIGMAwastaken (932558) on Wednesday March 11, 2009 @07:24PM (#27159985)
    That's the stupidest bit of free-market fundamentalism I've heard today.

    Due to all kinds of factors like economies of scale, customer loyalty, established physical presence, detailed infrastructure, etc. an existing company has so many competitive advantages over an upstart that to pretend some entrepreneur could (for God knows what reason) start up a consumer electronics store to take on, say Best Buy, is just absurd.

    Somehow this perfect entrepreneur would have to know that (for example) Best Buy was paying its managers more than the market reasonably could bear (which is basically impossible since Best Buy now almost wholly comprises the market for big box consumer electronics store, which means that the price BB pays its managers is, de facto, "the market price") and, in order to leverage this into a competitive advantage over BB, this manager would have to run his stores at least as well as BB does in nearly every other respect (the stores would have to be roughly equal in other respects for this small competitive advantage to accrue) and he would have to hope that this disparity in price he pays his managers (which couldn't reasonably be more than a few ~10k per manager) would, eventually, allow him to overtake BB or at least put enough pressure on them to lower their wages, which they would do, driving this stupid entrepreneur out of business, because of all the aforementioned advantages Best Buy has as an entrenched company. For example, BB could pressure suppliers not to sell to this company, or to sell products to him at a higher rate, because BB accounts for a huge amount of, say, Toshiba's laptop PC sales. So if Best Buy says "Either stop selling to this guy with 5 stores or stop selling to me, and my 3500", what do you think Toshiba is going to do?

    Of course, this is just an elaborate fiction. None is stupid enough to take on an entrenched monopoly like Best Buy for some Robin Hood goal of righting a wrong in manager pay when anyone with half a brain knows they would be pounded into dust like dozens of companies before them.

    On its face, this claim is absurd, that all it would take is ONE company paying its managers "just a little" less will have any effect on anything. Like all free market fantasies, this falls apart as soon as you give it more than a moment's reflection. For example, it forces you to either conclude that Best Buy is almost absolutely perfectly efficient (doubtful) or business leaders would absolutely be jumping at the chance to take them on. Thus if your free market logic were so impeccable, you'd be able to secure money from real capitalists (ie., people with money) and enact the plan yourself. So why haven't you?
  • Lie? (Score:5, Insightful)

    by PPH (736903) on Wednesday March 11, 2009 @07:28PM (#27160055)

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

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

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

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

  • by jamstar7 (694492) on Wednesday March 11, 2009 @08:57PM (#27161013)
    Kind of like the 4th Greatest Lie of History: "Hi. I'm from the Government. I"m here to help."
  • by tkrotchko (124118) on Wednesday March 11, 2009 @09:10PM (#27161137) Homepage

    >>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.

    >Nope. Still greed.

    Not really. If you're buying a used car from a guy, and he's asking for $5K, and book value is $4K is he being greedy?

    What if you offer him $3K? Are you being greedy?

    I think the answer to that is no. It's not immoral to sell things for as much as you can, nor is it immoral to buy things for as low as you can. Even communists do that. Nobody gives away stuff to be a nice guy. Nobody pays too much because they feel it's "the right thing to do". That applies to cars, widgets or labor. It's all a commodity.

  • by syousef (465911) on Wednesday March 11, 2009 @10:02PM (#27161521) Journal

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

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

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

  • Re:OD Sales (Score:3, Insightful)

    by symbolset (646467) on Wednesday March 11, 2009 @10:52PM (#27161941) Journal

    When the purpose of a store becomes to avoid the simple sale of the product at the marked price, management has failed and the store is doomed.

  • by dcollins (135727) on Thursday March 12, 2009 @01:00AM (#27162777) Homepage

    Nobody gives away stuff to be a nice guy.

    Bullshit. Sometimes I really wonder what circles you people travel in.

  • Re:Office Despot (Score:5, Insightful)

    by Daniel Dvorkin (106857) * on Thursday March 12, 2009 @01:07AM (#27162811) Homepage Journal

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

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

  • by commodore64_love (1445365) on Thursday March 12, 2009 @07:24AM (#27164949) Journal

    When I worked at Sears they made us push their "protection plans" which supposedly were better than extended warranties because a technician would clean your refrigerator or dryer or whatever once a year. Well, I can clean my own unit thank you, and so too can my customer.

    I quit that job as quickly as I could. I don't like lying to customers. Fact is: You Do Not Need an extended warranty. Most items die during the first few months, and that repair is provided FREE by the manufacturer. If an item survives its infancy, it will last a long long time.

    And when it finally dies 10-15 years later, it's cheaper to just buy a new unit than to pay that ~$50/year ($500 per decade) extended warranty fee.

  • by fulldecent (598482) on Thursday March 12, 2009 @09:52AM (#27166947) Homepage

    Everyone here knows not to buy these warranties. People who do buy the warranties subsidize the cheaper purchases that YOU make. This is how they offer the good deals on priceline (except on priceline stores, they call it "accessories").

    By bringing attention to the matter, you are making it harder for us in-the-knows to buy things for subsidized prices.

  • Re:Better Question (Score:1, Insightful)

    by Anonymous Coward on Thursday March 12, 2009 @10:08AM (#27167203)

    The parent post wasn't referring to the manufacturer, but the retailer. You can find plenty of local electronics retailers if you would leave your house for once.

  • by MightyMartian (840721) on Thursday March 12, 2009 @10:44AM (#27167865) Journal

    The problem is that the margins on electronics, and in particular notebooks, are so low that the only way a lot of these places can remain viable is to sell extended warranty plans. It's been like that for some time. I was working for a guy who sold point-of-sale systems back in the early 1990s, and basically the hardware was little more than a giveaway. We made a respectable margin on the software, but the real money was in setting up the systems and consultation.

    Unfortunately, when you're just a big box store, the whole notion of service is meaningless, particularly when it's the bloodsport of commission sales. To be honest with you, I pretty much avoid those stores now, either dealing online or with the few small-time computer stores in my area which, oddly enough, usually have a better selection and aren't that different on prices.

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