How Office Depot Pushes Service Plans On Customers 417
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."
Best Buy tried this as well to "fight" piracy. (Score:5, Interesting)
About a year ago, I walked into a local Best Buy, and was shocked, appalled, angry, but not surprised, to see anti-filesharing propaganda set up throughout the store.
I counted over 25 fliers hanging on walls, telling people "DOWNLOADING IS A CRIME!", and other propaganda. The most elaborate display they set up was in the MP3 Players section of the store. They mounted two flashing strobe lights on top of a display, designed to look like a police car's flashing lights. They then placed a large sign stating that "DOWNLOADING IS A CRIME. DON'T GO TO JAIL, DON'T DOWNLOAD".
So I asked one of the employees about the signs. They said it was an order by their upper management (as in, from their corporate offices). I then asked if they believed that downloading music is a criminal offense that can result in arrest, as they clearly try to say. They did not know. Some of them said "Yes", while others didn't answer the question.
Needless to say, I guess people complained, because the signs were gone after a while...
Pushing the hell out of service plans in retail... (Score:2, Interesting)
I bought mine... at Circuit City (Score:5, Interesting)
Believe it or not, I bought my current PC at Circuit City. I know, I know. But at the time, Circuit City had the same model HP Pavilion for as little or less than anyone online, with the additional advantage that I could jump on the bus and go buy one today, rather than having to wait around for UPS to deliver it. A week later, Amazon.com dropped the price by $50, so I went back to Circuit City and said, "Hey! I you guys ripped me off!" The nice kid at the cash register promptly credited $50 to my card. Total time without a working computer: 18 hours. Total money lost due to not shopping online: $0.
Am I sorry they're out of business?
I dunno. Not really.
Re:Company or store policy? (Score:4, Interesting)
OfficeMax was my shitty high school job, I had the same thing... I don't think I'll ever forget the poor customer who bought the protection plan on a $5 mouse because I was following the script and she didn't know how to say "no." I stopped following the script after that.
A former employee (Score:4, Interesting)
I went to one of these stupid meetings and all I could say for myself is that since I worked as a stocker in office supplies, I didn't even sell anything that I could in theory have pushed a service plan on, even if I didn't think they were crap. They responded that I was mistaken because batteries were in my department and they qualified. WTF? How the hell are you supposed to sell a service plan on a pack of AA batteries? I quit before the next Saturday as I'd found another job, though I probably would have given them notice if it weren't for the crappy work environment.
How is this different? (Score:1, Interesting)
How is it different from Barnes and Noble where a young teenager offers their *membership* everytime you check out? I only go their once a year anymore (as Amazon often has better prices than B&N membership prices). In fact, it was one of the motivating factors for me to stop walking in the store. They have been doing this for years. Perhaps this is the reason they are unable to keep employees.
Re:Company or store policy? (Score:5, Interesting)
Obviously, the employees hate that shit as much as the customers do.
Yes! Laymen, please keep that in mind the next time you get that crap from one of us working that shit job. Also know that those bullshit policies are often enforced by secret shoppers. Secret shoppers are people who work for agencies who are paid by the company to monitor employee behavioral compliance.
OfficeMax didn't have them then, but the drugstore chain did. In that case, the random weekly visits measured for all of the employees working in the store(YMMV):
Did the employee greet you with a smile?
Did the employee ask you if you found everything you wanted?
Did the employee offer to take(or call somebody to take) you to the item?
Did the employee offer a friendly parting comment?
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.
Re:The More You Read the Uglier It Gets (Score:3, Interesting)
Here's an account [consumerist.com] of a former Circuit City employee.
Not News (Score:3, Interesting)
I once worked at a bank that set high goals for the "sale" of credit life insurance on consumer loans. Without exception, credit life insurance obtained through the lender is a bad deal for the borrower and a great deal for the bank - DON'T EVER BUY CREDIT LIFE INSURANCE. If the borrower "asks" for it, the premium is not counted in the A.P.R. calculation; if it is required, it must be part of that calculation, vastly inflating the A.P.R. Guess how much credit life was sold as "asked for" and how much was sold as "required"?
We were instructed as to patently illegal and devious means to write it as "asked for" while the bank President stood in the room. The one fellow who questioned the practices was fired within the month. I left shortly thereafter.
It happens everywhere. That's the sad, harsh real world.
This is not news.
"Office Depot Provides Legitimate Extended Warranties At No Extra Cost" would be news.
Re:Company or store policy? (Score:5, Interesting)
Best Buy employees don't work on commission, true, but of course they gave more hours to the people that managed to get more customers to sign up for service plans. There's nothing wrong with that. Now, most of my co-workers were honest people; it wasn't uncommon to see some of them give the customers faulty information, but it was usually out of ignorance rather than trying to purposely be deceptive.
There was a handful of people, though, that would tell outright falsehoods to customers to get them to get a service plan or what have you. There was one employee in particular that would sign people up for the magazine subscriptions without even asking then (the 'free' trial that they charge you for after the 8th week if you don't cancel).
Of course, since I worked Customer Service I was the one who had to deal with all of the angry customers. Easily the most stressful job I've ever had. On the one side I had customers venting their frustrations at me. Then, with the way Best Buy's hierarchy is set up (there were about 12 managers, all with the same level of authority and conflicting sets of instructions) it was chaos trying to figure out exactly what they expected from me. So, I simply stuck to the official store policy and, of course, I got 'spoken to' (but not written up, because they really wouldn't have a leg to stand on) for accepting too many returns even though I was following company policy to the letter. After putting up with that shit for two years, I'd finally had enough and quit.
I suppose I'm going off on a tangent here, so let me get back on topic. I think that, with the exception of a few people, most retail employees loathe using lying to people, even if only through omission. Unfortunately, the way the system is setup, there isn't really much of a choice. I was fortunate enough that I could afford to quit a job that I hated (and that was back when the economy was still relatively good). But not everyone has that luxury. If you have a family to support or are a student paying your own tuition (as a lot of my co-workers were) it's not really an option. When I was working at Best Buy, the only people there that seemed to genuinely enjoy their job, other than the managers, were the people working in the warehouse (away from the customers). Most everyone else just sort of begrudgingly accepted that things could be worse and did their best to bear it.
Re:Company or store policy? (Score:2, Interesting)
no, he's right. I used to work at a Blockbuster and if the overall payroll for the week was lower (presumably there were a few set levels), the store manager got a cash bonus. i acknowledge that your free market bs about people taking the jobs and the consumers putting up with it is correct, but the bonus for low payroll is true. it's not illegal, it's not really immoral, it's just a shitty policy from a store that doesn't care about it's customers and is not surprisingly going under.
Re:Company or store policy? (Score:3, Interesting)
Could you be any more insulting to your species ?
Yes, of course he could. He could offer them a protection plan they don't need. I'd call that a first rate insult.
Once upon a kind sales person ... (Score:2, Interesting)
I remember going to one of these big box retailers - I vaguely remember it to be The Wiz (sometime known as Nobody beats The Wiz) and buying a VCR or a DVD payer (I forget which). The salesman told me about the extended service plan. I told him that I don't need one. He said, 'Sir, it is simple. Please buy the extended service plan. It will cost you $45.00. But you have 3 days within which you can come back to the store and cancel it. Please do it for my sake'
I did buy the extended service plan and then canceled it a couple of days later.
One other time, when I was buying one of those ultra-cheap DVD players ($20 or so) from Circuit City (I think - it could have Best Buy too) and the sales guy tried to foist a $25 extended waranty on me). When I told him that it would be cheaper for me to buy 2 of the players, instead of his warranty, he didn't know where to look.
All in all, pretty sad the way they catch unwary customers.
Re:Office Despot (Score:3, Interesting)
Re:Company or store policy? (Score:1, Interesting)
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.
I sense a contradiction there. Unless you're saying with a straight face that retail companies(especially no-union companies) strive to pay more for employees, or that businessmen are idiots.
I think GP was saying: 1) Pay the manager $53k instead of $63k, saving $10k. 2) Pay the each cashiers $1/hr more (~$4k/yr more total). 3) Profit $6k more than the other store. 4) By virtue of paying more, you can hire the best of the worst for just $1/hr more than minimum wage. Therefore his store's line movers a little faster and outcompetes the other store. Capitalism, as opposed to merchantalism or corporatism, returns and there is a net gain to the new store and the public at large, greater than the loss oto the old store.
Re:Company or store policy? (Score:4, Interesting)
Also, the GP didn't say how much the warranty cost.
I don't remember exactly, but far more than simply buying a new mouse when the old one fails, especially considering we're talking about devices with no moving parts here. I've never had an optical mouse fail on me under normal use. Also, depending on how you value your time, spending the hour or so digging up the receipt and waiting on the phone, going through whatever procedures they require for you to get your replacement... It's simply not worth spending that kind of time on something you can pay for out of pocket by just working for 15 minutes.
If it weren't for competitive strategies such as that we'd all still be paying $50 per mouse like we were 10 - 15 years ago.
Yeah, advances in miniaturization and manufacturing techniques have totally had nothing to do with that. I suppose you think the reason I've got more computing power for a third of the cost in my iPod Touch than my desktop machine had 15 years ago is because Apple sells warranties too!
Insinuating that people are somehow idiots who can't think for themselves, and that companies prey on them is WAY more insulting.
I suggest you take a hypnosis class some time, you'll learn that even your average person is fairly suggestible. On the low end of the bell curve there are people you can sell *anything* to. There's enough weak-willed people out there that a good panhandler can live in a house.
Re:Better Question (Score:5, Interesting)
Glad I could help [wisegeek.com]. On a serious note, if you're the sharp type and good at reading fine print, you can occasionally make money with "credit card arbitrage" by taking advantage of 0% APR balance transfer options. Not for the faint of heart, of course. Or you can take advantage of the US Mint's offers [slickdeals.net] to sell dollar coins at face value with free shipping to skim credit card rewards points.
Re:Company or store policy? (Score:3, Interesting)
I worked at CompUSA, and our management was constantly trying to get us to sign people up with *AOL*. The whole thing was so ridiculous that even the department managers didn't fire us for lack of sales.
The people who made a lot of money on commissions were the hardware guys selling compete systems. I never got to see a big benefit from selling the plans, other than I got to keep my job.
Re:Better Question (Score:3, Interesting)
Because, douchebag, you are sowing the seeds of your own demise.
Buy from a national chain, and the money flows outward, probably never to return to your region/city/neighborhood.
For every $100 spent at a national book chain, only an infinitesimal amount remains locally (something like $10 or so). Buy from a local book store, and at least $45 remains in your neighborhood.
Which means more employment, etc., etc. Dig????
And in the present economy - which will take from 10 to 20 years to rebound from, if they immediately get rid of Geithner, Bernanke, Summers, et al., and send in the military to all the offshore tax havens (or finance centers) and confiscate all those records for American and American-based multinationals who refuse to pay their taxes (73% at last count) by utilizing the process of "money laundering"......we need every extra bit we can squeeze out of it.
Re:Company or store policy? (Score:1, Interesting)
Another former associate here. Same deal. When I was there, the big deal was to sell the custom computers from the kiosk, the configure-to-order systems. Which drove me absolutely farking batty, because the CTO systems weren't any better than the shelf systems, except that you could tweak the setup some.
People didn't come into our store to buy CTO systems. If they wanted a mail order computer, they could mail order it themselves. They came into the store to buy a system off the shelf, one that they could have *right now*. And I had a coworker that would lie about the advantages of the CTO systems to make the sale, so he was the manager's golden boy. Bastiges, all of them.
Re:Better Question (Score:5, Interesting)
Great! Point me to a local, non-national chain store to buy a netbook or MID (or laptop, for that matter) and I'm totally there (oh, and I should add at an attractive price, since that's usually what takes people to national chains).
Look, electronics and books are two very different industries and you just can't compare them. Books can be and are sometimes published and produced locally. I don't know of any local, US-based place that produces the electronics I would use. Dig?
Re:Office Despot (Score:2, Interesting)
Except that more people abuse legal, prescription drugs than illegal drugs in the U.S. And that money goes into the pocket of Big Pharma...oh. Nevermind.
Re:The More You Read the Uglier It Gets (Score:2, Interesting)
That's not capitalism, that is stupidity. When they go bankrupt, that is capitalism removing the inefficient supplier from the market.
Re:Office Depot CEO: "Worst CEO of 2008" (Score:3, Interesting)
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.
Not only that, but it seems to me that they're doing it wrong if they're pushing an extended warranty with the hard-sell. Its supposed to be an impulse buy that customers don't really care one way or another about, so they'll agree to another nickel and dime.
I worked at gamestop for a while, they have their version of the extended warranty that was for 1 year on new and used games, for something like three dollars I think. The trick was telling the customers they wanted to spend just a tiny bit more rather than trying to convince them it was in their interest. I guess some people see gamestop employees as authorities on games and listen to them, which is silly.
If Office Depot is having problems pushing the extended warranties on people, they're charging too much, and possibly offering too much, making it something people actually think about rather than just saying "sure, I don't care." Maybe they should offer the same warranty that the manufacturer does for like $20 or $10, and in the fine print say something like we'll ship it to the manufacturer for you, you'll get your replacement in 4-6 weeks.
And by "should" I mean "they're clearly without morals, so this is just doing it smarter, and they'd go to hell quicker for doing it."
Re:Office Depot CEO: "Worst CEO of 2008" (Score:3, Interesting)
Because once you get past having enough money to survive the rest of your life, money just becomes a way of keeping score. I remember hearing Bernie Ecclestone saying it once in an interview and I've heard other very rich people express the same sentiment.
I expect someone like Buffett will have a hundred million or so stashed somewhere. He could loose everything else and still be able to live better than virtually almost anyone else in the world.
For the benefit of the doubt (Score:2, Interesting)
Yes, the employees and managers make a profit and bonuses (both) from selling them. And perhaps the plans are a bit more expensive than they should be.
But ya know what? If a customer ever came back to the store, complaining about a product that they had purchased that broke, for WHATEVER reason, we would ALWAYS take care of them if they had purchased a plan, even if they were still under the manufacturer's warranty. You can hate on OD all you want, and there very well may be "evil" stores out there who are just out to screw customers, but my experience was very different.
Our store had frequent repeat customers, because we would simply ask them if they wanted the plan. If they said no, we let it be. If they were hesitant, we would explain exactly what it would do for them. Because of this straightforward, honest, approach, people liked us and we always sold more plans than most other stores in the whole company.
So, again, it sucks that there are these bad policies put in place by certain stores, but you should know that not all stores take this approach, even if it is demanded by upper management. Having the customer's trust always brought more business.
Re:A former employee (Score:4, Interesting)
I witnessed, firsthand, a 'model' employee taking a printer out of a customer's cart when the customer revealed that they weren't going to buy the money pit of an extended warranty plan! Subsequently telling that same customer that the entire wall of boxed printers was on hold for 'a school' was the icing on that particular cake.
Our store had the best rankings in the district because 'we' flat-out refused to let warranty-able items go out the door without a warranty being purchased. While the official store policy was never to use those sorts of tactics, there was a sheet that was distributed to each store in a given district, posted prominently in the break room, ranking each store by how well they did selling those warranty plans, and the best store got awards and the like. Kind of a we don't condone this behavior, but if it gets results, we'll pretend not to notice arrangement, it seemed.
I got in some hot water for not pushing those warranties - I sold perhaps one a month, usually because the customer wanted it - but I had other good employee qualities that they apparently decided were worth keeping me for.
Anyway. I have no idea if they still do such a thing, but it's not a new idea.
Re:I can top that... (Score:3, Interesting)
A clever manager would be able to point to the clause that states normal wear through proper usage is not covered.
He probably wasn't clever enough for that though.