Service Contracts!
Let me set the scene: A man and a woman enter a Best Buy looking to buy a computer. They know what they want. However, the employees of Best Buy seem to know what they want. They want a service contract, but they don't know it yet.
For a mere 25% of the purchase price, or roughly $250, Best Buy will fix any unforseen maladies that may arise. And the world will be as it should be, happy.
They say that they don't want the contract. If they wanted an extended warrenty, the manufacturer provides one for less than the Best Buy contract. They want a service contract, but they don't know it yet.
The clerk insists, what'll they do if the machine suddenly fails? They ease his fears by explaining that they have a tech-able son capable of fixing the problem. But Best Buy will fix it for free*!
Free after $250 purchase price of three year contract.
They inform him again, the answer is the same. No. He throws them another sales pitch. He's no longer a store-front clerk, he's a used-car salesman in a blue vest.
Why don't they want the contract? It's for their own good. He summons a brother in arms to help pitch the contract. For a fourth, a fifth, and a sixth time, they refuse.
If you mention the service contract one more time, we're leaving, the man says.
The young clerks try to pitch the contract again.
The couple leaves. Best Buy loses the thousand dollars the purchase would have brought them, though they actually won.
To fix a computer, they must employ a low level grunt at slightly greater than minimum wage. Few problems would take greater than an hour to fix, if said grunt is earning $8 / hour, their net profit is $242. Obviously, not every service contract is collected upon, thus ensuring risk and pain-free profit.
Actual Best Buy employee quotes:
"If a customer comes in and you have the idea that they're not going to buy the service plan, you'll tell them you don't have the product in stock" "You definitely are just looking to prey on their fears, so that they're more likely to buy that service plan."
"I would blatantly lie to the customer, to be honest."
"Just shoot down the manufacturer's warranty with blatant lies."
(quotes from: http://www.cbsnews.com/now/story/0,1597,235079-412,00.shtml)
The quoted employees worked at a store in Florida. I do not live in Florida. This is not an isolated case.
Disclaimer: The contents of this node are entirely statements of opinion.
Although this is Best Buy instead of Rants About Best Buy Sucking, this node was placed here as per request of the friendly neighborhood editors.