360 Bundles Lead To Best Buy Housecleaning

Groo Wanderer writes "At the launch of the XBox 360, there were reports of forced and unwanted bundling by several companies, most notably Best Buy. There were things said back and forth, and the usual corporate banter. They have followed through, this time, and a good number of people lost their jobs." From the article: "We are told a manager that started the procedure is no longer employed at Best Buy. At least one senior district manager is no longer employed, and some of the nailings are rumored to have gone even higher. The big yellow inquisition did not stop there, and several other managers and assorted white collar workers were given an escorted walk to the parking lot."

Why is bundling wrong?

I don't get it, what is wrong with a store saying "Sure I will sell you this thing you really want, but at the price I want to charge. I will even include some crap you don't really want, but you still have to pay the price I want to charge"

Seems that if you don't want to pay the price you go elsewhere or you don't buy the product.

Re:Why is bundling wrong?

Because Best Buy is a chain. Each store has its own boss, but they still have to answer to the Big Boss. In other words, they were already bound by a previous deal

Best Buy's don paid for all the Xboxes, which he then sold to his capos. One of the terms of this sale was that "youse hafta agrees wit company polisees, capiche?"

Re:Why is bundling wrong?

From a consumer perspective, the store is misusing its position (being one of the few stores with a limited stock of the product) to force you to pay higher costs that you don't want to pay to get extra products you don't want just so you can have the core product that you DID want. This is different than just charging a higher price due to limited availability.

From the store's perspective, this is bad because it probably drove a lot of customers into the arms of competitors. Which means that customers they might have counted on to come back to purchase games and accessories will now turn to online stores or other retailers for their needs.

THAT is what's so wrong.

Oh, and it can attract the attention of the Federal Trade Commission for anti-consumer practices.

Re:Why is bundling wrong?

The problem is that they advertised the real $399 price and didn't honour it. This is a classic bait-and-switch.

There were also rumours that some EBs and GameStops were fiddling with the pre-order wait list based on how many games and peripherals were also pre-ordered. Does anyone have more information on that?

Re:Why is bundling wrong?

I'm hiding as a coward for this one. I'm an ex-EB employee and still know a lot of the managers around my area personally. And yes, they do have a tendency to play with presell lists and call people who ordered more first instead of who ordered first. They also forced bundles on the customers. They do it because of pressure from the GM to meet the add-on numbers set for each store (which is pretty much impossible without breaking the rules.)

This is also how the featured game of the month works, also. No matter how bad it is, each store has to sell a certain amount, and people do get fired when they're not met (even when the game was Turok and the number worked out to 20 in an hour every hour, even though the store was lucky to get 20 people in some days.)

Managers that have stores that don't meet the numbers are first sent off to work in the crappiest stores, sometimes forced to demote themselves (with a threat of just being fired otherwise) and then promptly let go within a few months.

EB Games has to be one of the worst companies I've ever worked for. I'm glad it was just a job I had while looking for real work instead of a career like it is for some of the managers.

Bait and switch, not bundling

You have to read all the articles, not just the attached one, but the three articles at the beginning of the referenced one. This wasn't just bundling, this was bait and switch.

Here's an example snippet from one of those articles:

TMCnet news reports similar events in Spokane, WA. Best Buy's Sunday ad offered the Xbox 360 for $299 dollars, but a sign was posted at the store on Tuesday as a "correction notice" to inform customers that they could only buy package deals starting at $569.93.

If best buy advertises something for $299, and doesn't actually have that item but has a similar one that's more expensive, that's bait and switch, and it's illegal in the United States. You cannot advertise one price for one model or package then sell another model/package that has more features but at a higher price simply because you never had that model. The ad said they were selling it so they better sell it. In fact, the law states that those people had the right to demand the higher bundle for the lower price, but I infer from the article that Best Buy obfuscated this enough so that few to none of the people scammed were able to catch that when they first went in.

And to top it all off, companies should and do go out of their way to avoid these mistakes, because the law also says that if a company does make this mistake, customers have every right to take advantage of it. This is to make sure companies don't up and use the "oops, That's a mistake in the ad we don't stock that. Gee, that's 4 mistakes in just one month, sorry, but I do have the higher end model for you if you like."

If it were a simple stock out that's one thing but some stores never even stocked one of the nonbundled console.

This smacks of a small time conspiracy but it's most definitely illegal. Best Buy is cleaning house to make it look like they care and showing good will so as to deflect any consumer lawsuits.

Meanwhile...

LAWYER: What of the reports of the Rebel fleet massing near Best Buy?

GATES: It is of no concern. Soon the Rebellion will be crushed and young Sony will be one of us! Your work here is finished, my friend. Go out to the command ship and await my orders.

Housecleaning

About time someone cleaned up those stores a bit. Dirty bastards with all that yellow and blue...nauseating.

Lemme git this straight...

They put policies in place which make retail managers feel pressured to pump up their sales figures by "forcing" excessive bundles on desperate (and foolish) pre-Christmas X-Box 360 buyers.

Then, when they get heat for it, they respond by firing the retail managers, but keep all the largesse of the whole scam firmly in their pockets.

And we are supposed to take this as an indicator that they are interested in doing the right thing?

Re:Lemme git this straight...

It's the classic "bad apple" tactic. Just have very stringent policies in place, but make the goals such that it's either difficult or impossible to meet without breaking those policies. If no one notices, promotions all around. If someone calls them on it, then an easy scapegoat and much haughty pointing to the policy. Either way, the organization wins. Abu Grahib was a perfect example of that and this Best Buy ploy is another. Of course, I'm not saying they are of equal importance or ramification at all, rather the technique is identical.

I'm not so sure how to feel about this

Best Buy had to sell the 360 at a certain price point, and that price was seemingly far below what the demand for the 360's was. So from a certain perspective, the bundles make sense if you're trying to make supply meet demand.

On the other hand, we told our son we'd get him an XBox for Christmas since the price should go down with the 360 coming out. I figured they would go down to $129 or maybe even $99 if we were lucky. And then what happens? They throw in a cruddy racing game and jack the price of the original XBox UP by $30 to $179! The racing game isn't too bad, but it isn't a game we would have chosen to buy if it weren't bundled with the system. I don't like what they did, so I can understand peoples' complaints, but I see very little difference between what Microsoft has done with the original XBox and what Best Buy has done with the XBox 360.

$2 bill fiasco

Interesting that BestBuy took action against stores that forced bundle sales. They did absolutely nothing about the store who had someone arrested for using legal US currency [morons.org].

BestBuy: good concept, bad execution.

Greed Kills

It is a shame that what once was some sort of religeous holliday, has now been pounced on by the retail industry as a major source of income. When I go xmass shopping, I don't feel the warm feeling of shopping in the snow with other hurried patrons. Instead, I am filled with fears of inadequacy, at not being a good consumer, or gift giver. However, it is more distasteful to be taken advantage of by the greed of the retailers.

War on xmass it is, then.

They have to move those titles somehow...

"They have to move those titles somehow..."

The titles weren't the problem. Best Buy left it open which games you could buy, and there were multiple games that everyone wanted (Perfect Dark Zero, COD2, PGR3, Kameo).

The problem was many Best Buy stores *forced* you to purchase certain accessories. One of the bundles included 2 games and a wireless adapter (waste of money) the other forced controllers and recharge packs.

Scapegoating?

Problem: Customers are offended by your rotten strategies, and are starting to boycott your stores.
Solution: Fire a bunch of lower managers. Blame it all on them. Sure, it's rotten, but whatever works.

Can't resist

The big yellow inquisition did not stop there, and several other managers and assorted white collar workers were given an escorted walk to the parking lot.

NOBODY expects the big yellow inquisition!

Bundles != Bad

I got my 360 at Costco, bundled with an extra wireless controller, Kameo, and 1 play and charge kit. That was the only configuration they offered. But I was going to buy both accessories for sure and Kameo was already a "maybe" for me. So if you calculated the bundled accessories at retail price (Have you seen *any* 360 stuff below retail? Not me.), Kameo came out to a price of $10. So basically, it was $50 below the total retail price of the items in the bundle. I acceptd a lack of choice in exchange for a discount. Seemed fair to me.

But advertising a bare 360 and then not offering it is, in fact, scummy. And seriously - how many launch day 360 buyers were really going to walk out of the store without some games and controllers? Why anger and alienate your market by forcing them to make purchases many would make without the extra pressure?

A different way to look at it.

This article assumes that this is not a witchhunt. To me, this sounds a lot like corporate ass-covering.

I would not be surprised if the people at the top of this fiasco covered through their underlings to the lions to save their own asses.

Where's all the hate?

This is supposed to be Slashdot.

Let's look at why this happened:

• Microsoft restricts unit for-sale prices on items (like everyone in this industry), keeping vendors from charging natural prices based on availability.
• Microsoft limits stock [slashdot.org] to create an artificial shortage.
• Best Buy execs push $/sqft numbers as paramount, replacing underperforming managers.

What happens? The people at the end of this chain get cut off. Aren't we supposed to be hating on Microsoft here?

Re:Well..

They have to move those titles somehow...

Re:What is the definition of "forced"?

The bundling was "forced" on buyers. The buy itself wasn't forced.

It's a "don't be an ass to your customers" issue.

Congrats to Best Buy for at least appearing to fix the problem.

Re:How much you wanna bet..

You overestimate the ethics of Best Buy. They fired the whistleblowers. They fired the ones who came up with the policy allowing partial returns on the bundles. When accounting found out they lost millions on returns and the bad press from the leaks heads rolled alright. Just not the ones insinuated in the article.

Re:did they really lie about the price?

Yes and No. The situation you describe is boderline legal at best. The fact that the car is still on the show room floor (it was just sold) is why its not illegal straight up. Laws preventing bait and switch were designed to prevent exactly what you describe from happening. In this case i suppose either no has filed a case with the FTC yet against your employer or your employer is succesfully nagivating the thin line of legality. In any case, Best Buy can't actually do that as they have no way to even pretend that they just sold out of the lower priced item. And even if they could legally skate the same line, there's no way they would want to in this case due to the PR hit they are taking right now.

Re:This HAS to be BS!

You misread the sentence. The point here is that 360 tries to get rid of its surplus of lead by bundling it with housecleaning from Best Buy.

Re:did they really lie about the price?

Dixons/PC World in the UK recently got bust for advertising a cheap laptop and not having sufficient stock at the advertised price. (Their response was something along the lines of, "we never expected such a big response".) Admittedly it was the advertising standards authority that bust them, which amounted to little more than "don't do it again" and a very stern look.