Best Buy

Best Buy Co., Inc. {{nyse|BBY}} is the largest specialty retailer of consumer electronics, personal computers and related goods in North America. The company's subsidiaries include Geek Squad, Magnolia Audio Video, and Future Shop in Canada, which together operate over 700 stores in the United States and Canada. It is headquartered in Richfield, Minnesota.

Criticisms

Best Buy has many critics of the way they do business.

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Poor sales practices

Best Buy has been accused of bad sales practices. Best Buy's product specialists have been accused of being outrageously pushy in the promotion of service plans (called Performance Service Plans or PSPs by Best Buy), often lying or misrepresenting the terms. Best Buy also specifically trains its employees not to misrepresent the terms of the plan through an e-learning system, and customers also have the official brochure containing all information related to the plan to rely on. However, this doesn't always stop employees from misrepresenting the terms. Lawsuits filed from the state of Florida and Wisconsin have been largely based on these accusitions.

Related Topics:
Service plans - Florida - Wisconsin

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Largely because of the promise of increased profitability, Best Buy's is attempting to move into a more service oriented business model. As such, Best Buy pushes many software installation services, such as installations of Norton Anti-Virus on new computer sales. Most computers Best Buy sells come with a full version of Norton Anti-Virus with 60 days of updates included, and many come with full versions of anti-spyware applications.

Related Topics:
Service - Norton Anti-Virus

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Best Buy product specialists (or sales people) are not on commission. One potential cause of these practices is Best Buy's action of ranking sales departments within districts based strict service and accessory goals. Individual employee sales are usually not tracked, however.

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Bait and switch tactics

Best Buy has been accused of bait and switch tactics on many occasions, advertising a product and then refusing to sell it at the advertised price. One such incident involved a video card being advertised at $99 spured a nearly five hundred page thread on the popular forums of hardware site HardOCP. Best Buy claims that these incidents are rare and usually due to the fact that Best Buy advertises on a national level. Individual store stock levels are not checked when the circulars are produced (sometimes up to 3 months in advance of publication).

Related Topics:
Bait and switch - Thread - HardOCP

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However, even though the general advertisements are the same on a national level, they do differ slightly. In New York, all retailers must legally provide rainchecks for any product that is advertised but out of stock. The adverisements Best Buy issues in New York do not contain the wording "No rainchecks." on many advertised products.

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Consumer advocacy

A consumer advocacy website targeting Best Buy, BestBuySux.org, has received thousands of letters from disgruntled employees and customers, and ranks among the most popular consumer advocacy websites on the Internet.

Related Topics:
Consumer advocacy - Internet

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Lawsuits

Best Buy is the second largest target of lawsuits in the United States.

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On May 26, 2005, Wisconsin Attorney General Peg Lautenschlager filed a lawsuit against Best Buy Co. for alleged mistreatment of customers. This mistreatment included the alleged misrepresentations of product rebates, service plans, and the return & exchange policies.

Related Topics:
May 26 - 2005 - Wisconsin - Rebate - Service plans

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According to Best Buy's spokesperson, Susan Busch, "Based on our view of the allegations in the complaint, we intend to vigorously defend the lawsuit and cannot comment any further on the pending litigation at this time."

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The suit follows an investigation in 2004 by Wisconsin's Department of Agriculture, Trade and Consumer Protection agency, after receiving complaints about the retailer's stores in that state. http://www.madison.com/wsj/home/biz/index.php?ntid=41170&ntpid=3

Related Topics:
2004 - Wisconsin

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Other incidents

In 1997, a Reston, Virginia man, Ronald Kahlow, was arrested twice for trespassing while comparison shopping. Kahlow had first taken a laptop into the store to record prices on televisions, then a notepad. Kahlow later filed a civil suit against the company.

Related Topics:
1997 - Reston, Virginia

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In late November 2004, Dell ran an advertisement claiming Best Buy wishes to 'fire' 20% of its customer base. The advertisement was based on a Wall Street Journal interview with the company's CEO, Bradbury Anderson. Both the Dell ad and the Wall Street Journal article were claimed by Best Buy to have taken comments out of context, and confused Best Buy policies with ideas presented in a consultant's book.

Related Topics:
Dell - Advertisement - Wall Street Journal

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On March 8, 2005, the Baltimore Sun reported on a bizarre incident involving a Best Buy store in Lutherville-Timonium, Maryland. The technicians there incorrectly told Mike Bolesta that they were going to waive a $114 car stereo installation fee since they had previously been wrong when they said a certain model would fit in his son's car. When he was later called and told that he had to return to pay the fee, he decided to pay in fifty-seven $2 bills. Apparently, he keeps the rare bills around as a gimmick for the children whom he hosts as owner of Capital City Student Tours.

Related Topics:
March 8 - 2005 - Baltimore Sun - Lutherville-Timonium, Maryland - $2 bills

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The cashier at first refused to accept the $2 bills, not knowing that it is actually against federal law not to accept any form of cash payment for a debt. The staff at the Best Buy store thought that the bills were counterfeit, because (1) they had never seen such a denomination before and (2) the ink smeared when the bills were rubbed with a counterfeit detection pen. They called Baltimore County police, who promptly arrested Bolesta and took him to jail. He was freed only after a Secret Service agent explained that the ink on U.S. dollar bills is capable of smearing. The incident was subsequently publicized on numerous blogs and Web sites as an example of the incompetence of Best Buy personnel.

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