Things Electronics Retailers Won’t Say
Some of the hype and come-ons make the used-car lot seem tame.
1. “That item you just bought isn’t really in stock.”
Such “out-of-stock” cancellations have become more common, particularly during big sales and busy times when site inventory monitoring systems can’t keep up with orders placed, says Brad
Wilson, the founder of sale site BradsDeals.com. It’s not a problem specific to one retailer, he says, but some are worse than others. “Whenever there’s a great deal at Best Buy, we just wait for the comment from someone who says they placed the order and it didn’t get fulfilled,” says Wilson. Consumers reported plenty of complaints similar to Schrage’s about Best Buy orders during the holiday season. Best Buy says it was a one-time problem. “The online order issue we encountered was due to a combination of software and process issues,” says a spokeswoman. “We caught the issue quickly, but not as quickly as we would have liked. We have addressed these issues and do not expect this to happen again.”
Consumers’ only recourse is to put little stock in online stock promises, Wilson says. Instead take advantage of websites that allow in-store pickup of merchandise ordered online. Absent that, call the store to confirm that the site is correct in stating that it has an item in stock. If a confirmed order is later cancelled, complain. Two years ago, 1,269 consumers signed a petition on complaint site Groubal.com because their black Friday TV orders at Fry’s Electronics were cancelled. It worked, says a Groubal spokesman — Fry’s decided to provide the TVs to each buyer at the promised price. A Fry’s spokesman declined to comment. More recently, Schrage got a $75 gift card after calling customer service and emailing Best Buy’s chief executive Brian Dunn.
2. “We’re the ones protected by this warranty.”
Most gadgets have a slim profit margins, which may be why retailers are so anxious to sell shoppers warranties, service plans and other protections, says experts — even on purchases as cheap as a $20 cordless phone. Profit from those plans can easily top 50%, in large part because shoppers have little chance to make a claim on them. “Electronics, more than other products, tend to fail either in the first 30 days — which is covered by the manufacturer’s warranty — or not at all,” says Andrew Eisner, director of content for Retrevo.com.
They also typically exclude accidental damage resulting from say, water exposure or a fall. “We’d be the first to acknowledge that service plans aren’t for everyone,” says a spokeswoman for Best Buy. “We’re finding that these plans are particularly desirable to customers who are buying mobile products or purchasing higher-end home theater gear.” Just don’t expect the retailers to disclose just how much they make from extended warranties and the like, since they’re not broken out in quarterly earnings reports. “I haven’t seen a number on that in probably a decade,” says R.J. Hottovy, an industry analyst for Morningstar. But he says it likely represents a significant and growing part of their revenue as digital media eats into DVD and CD sales and companies refocus on selling big-ticket items.
Shoppers can avoid the hype and still stay protected by paying with one of the many credit cards that automatically double manufacturers’ warranties. BradsDeals.com founder Wilson recently took advantage of this when his 20-month-old Samsung television died. American Express sent a technician out to see if it could be repaired (it could not) and then credited Wilson the original purchase price. That refund bought a better TV now than it did two years ago, says Wilson.
Consumers who still want extended protection should compare plans available from manufacturers, retailers, and independent warranty providers such as SquareTrade, experts say. Shoppers usually have 30 days from purchasing a gadget to decide if they want some kind of extra protection plan, and there’s no requirement that it come from the store where the item was bought. Prices vary and plans may offer different coverage for different kinds of potential problems. Thus one warranty might be better than another for a consumer looking for, say, tech support or worried about a cracked screen.
3. “We’ll sell you more than you need.”
Ah, the up-sell. That’s when salespeople try to persuade you that you’ll need a lot of other things besides what you’re buying. It’s particularly prevalent when shopping for electronics, experts say. Home theater HDMI cables, camera memory cards and printer ink are all more profitable for retailers than the gadgets themselves, says Retrevo’s Eisner. “Some of that stuff is useful, but you really have to be careful not to get pressured into buying the expensive version they want to sell you,” he says. Shoppers should also be wary of an up-sell on the gadget itself. Store associates often push the newest models, even though there may functionally be little improvement over last year’s, says technology consultant Alex Goldfayn, author of “Evangelist Marketing.” The same goes for top-of-the-line models when an entry-level may better fit the buyer’s needs.
But Shawn DuBravak, chief economist for the Consumer Electronics Association, an industry group, says most salespeople don’t get commissions, so recommendations are likely motivated more by personal preference and knowledge of a device than profit. “If [the up-sell] was ever prevalent, it’s certainly not today,” he says. It’s valid for a salesperson to ask how you’ll be using a device and offer recommendations, but it helps to have done your own research beforehand, says Eisner. Read expert and consumer reviews to determine which features are a must and which aren’t necessary. “With most electronics these days, the standard-out-of-the-box version is going to be enough for most people’s needs,” he says.
4. “Good luck comparing our prices.”
Retailers often tout policies that will match competitors’ prices. But experts say finding an exact price match is easier said than done, even with the rash of new smartphone comparison apps. Retailers “don’t want some smart-aleck consumer coming in and saying, ‘it’s $20 cheaper at X,'” says Edgar Dworsky, founder of ConsumerWorld.org, a consumer advocacy site. Dworsky has seen employees reject price matches because they didn’t consider a particular retailer a competitor, the competitor’s nearest location wasn’t close enough or it didn’t currently have the sale item in stock.
There are other complications, too. Retailers frequently create special bundles in popular categories such as a video game console with two games. That kind of thing is hard to find a match for because competitors don’t often offer the exact same combination of products. Another stumbling block: Retailers often negotiate with manufacturers for exclusive model numbers, says Retrevo’s Eisner. Sam’s Club, for example, is the only retailer selling Sony BX421 televisions, which Retrevo says, aside from the special model number, are nearly identical to Sony BX420 series sets sold at Wal-Mart. But if you walked into Wal-Mart saying Sam’s sells its model for less, it’s likely you’d be rejected because it’s not an exact match, Dworksy says. Price-matching policies typically require that the competitor with the lower price be selling the exact same item, down to the model number, he says. Wal-Mart did not respond to requests for comment.
Deal hunters are better off looking for comparisons from home before they shop, says Dworsky. That way you simply buy from the retailer with the lowest price instead of trying to negotiate a match. If you’re counting on a price match, print out a copy of the store’s policy to bring in so you can prove to an overzealous employee that, say, there’s no requirement that the competitor’s nearest store be within a five-mile radius, he says. Sometimes getting a match will save you more money, so it’s worth the hassle, he adds. Stores such as Sears and Lowe’s say they will match a competitor’s price and offer an extra 10% discount.
5. “This sale is final.”
Problems with returns are the biggest complaint about electronics purchases, according to the Better Business Bureau. It’s no surprise, say experts: Department stores often have separate return policies for electronics and electronics retailers have different policies for different products. Conditions can be fairly restrictive, says Chris Morran, a senior editor for consumer advocacy site The Consumerist. “We’ve had people write in that they have bought three or four crappy laptops because they didn’t realize they couldn’t get a refund, only a new laptop,” he says. What’s more, returns can still cost you money. Although some retailers have eliminated restocking fees in recent years, Amazon charges a return shipping fee on many electronics, while Newegg.com tacks on a 15% restocking fee for most returns. A Newegg.com spokeswoman says the fee is charged “to encourage customers to purchase products they intend to keep.” Shoppers who received defective products won’t be charged the fee, she says, and customer service representatives can waive it for other returns at their discretion. Amazon.com did not respond to requests for comment.
Reading the fine print of the retailer’s return policy online or at the customer service desk in stores will go a long way toward avoiding hassles, Morran says. It also helps to keep as much of the original packaging intact as possible. Many stores require it for a return if the product isn’t defective. Otherwise, they will tack on a restocking fee for an opened item. Or they might not take it back at all. “If you have buyer’s remorse, you might be stuck with it,” he says.
6. “You should have bought this online.”
When Iris Karasick of New York was in the market for a new TV last year, prices in stores for the set she wanted — a 55″ 1080p Samsung LED — were around $2,500. Then her brother recommended online wholesale site East Coast TVs. Its price: $1,700 for the same model, which arrived within days in pristine condition. “When it comes to electronics, there’s very little reason not to buy online,” says Goldfayn. Online reviews provide better insight for uncertain shoppers than many inexpert store employees can, he says. Plus, as Karasick found, prices can be much lower. In fact, many bricks-and-mortar stores, including Wal-Mart, Fry’s and Target, won’t match their own dot-com’s prices. “To remain competitive, sales or promotions may vary from stores to Target.com,” says a Target spokeswoman. A spokesman for Fry’s declined to comment. Wal-Mart did not respond to requests for comment.
Buying online is not risk free. Experts suggest shoppers read reviews of sites as well as the gadgets to make sure that the retailer has a good reputation for filling orders in a timely fashion and that products arrive undamaged. As mentioned in number four, it’s also important to review return and re-stocking policies in case there’s a problem with the order or the device.