EB Games Encourages Employees To eBay Gouge

Our cottage-cheese-golem brethren over at Kotaku took a break from mouthbreathing and fantasizing about imaginary elves who live in their computer to throw us a couple of links yesterday. Never say we don’t return the favor.

According to Kotaku, employees at Electronics Boutique, a popular game store, are only going to be receiving 5 or 6 PlayStation 3 video game consoles per store when it comes out in November. Who cares, right? Except…

    When I asked them about Playstation 3s, the manager on duty told me that every store in the chain is getting about four or five each, which means they aren’t getting any. I asked him to explain and he said, while literally rubbing his hands together, “They’re letting employees buy PS3s, so there won’t be any left.” I asked if they have to stand in line and he said no, the second we open we’ll just buy them up. He did say that they can only buy one each, but I’m guessing most stories have at least five employees smart enough to know how to use Ebay.

In other words, Electronics Boutique’s policy is to allow their employees to buy up the entire stock of consoles, then sell them on eBay. Given that a PS3 will cost $600 when it is released and no one is going to be able to buy them (massive shortages are expected, even without employees ganking all the consoles) this means that Electronics Boutique is giving its employees open license to gouge their own customers on eBay, where a PS3 will likely go for a couple thousand. Nice one, EB.

EB Employee: We’re Buying All Our PS3s [Kotaku]

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  1. ChazB says:

    This doesn’t surprise me. Lots of retailers allow their employees to purchase items before the public, or put them on hold.

    My fiance worked for a major music retailer and they would get in limited edition boxsets and other stuff that was only available in limited quantities the week before release. It would get unpacked, and if a staff member wanted it, they put it on hold until their next shift after release date.

    I specifically remember a CD that came out and was soon recalled due to copyright infringement on the cover art. An employee bought every copy in all the stores in the city and then sold them on eBay for a profit.

    My point to all this is while this type of activity may not be well liked by some, it is very, very common.

  2. Hawkins says:

    Retail jobs are miserable and wretched, poorly paid and usually without benefits.

    Employee discounts, and preferential access to the good stuff, are among the few particles of gravy that these mall-dwelling schlubs get.

    I applaud the management of the Electronics Boutique.

  3. This problem is much like telemarketing. If it wasn’t profitable, they wouldn’t do it. Ie, if suckers weren’t willing to pay outrageous prices for a console today that they could buy for a somewhat less outrageous price tomorrow, register jockey’s wouldn’t be buying them up before the customers.

    Anyway, who the hell is going to buy a PS3? $600 for a game console? You’d have to be a sucker to pay that much in the first place.

  4. bambino says:

    Hawkins, it takes every ounce of my will to not make a comment toward you that will get me banned. The employees took the job. That entitles them to a paycheck. Not to advance copies of limited merchandise so that they can gouge on the internet.

  5. misternovember says:

    I used to work for EB Games, and this article is a little misleading. EB employees definitely intend on price gouging, I made a killing off of XBox 360s last year, but EB MANAGEMENT does not condone it. I can’t speak for individual store managers, but the company as a whole has a strict policy against reselling product bought by or given to employees. We couldnt even trade in games they gave us, even though they would make a profit on them! Now, of course, they weren’t requesting our Ebay logins or anything redic, so you can make the arguement that it isn’t policed, but it is still policy. Crayonshinobi is right, however; don’t be made at the employees, be mad at the goofballs who are willing to pay outrageous prices for these consoles on Ebay.

  6. iameleveneight says:

    “Hawkins, it takes every ounce of my will to not make a comment toward you that will get me banned. The employees took the job. That entitles them to a paycheck. Not to advance copies of limited merchandise so that they can gouge on the internet.”

    In happy-happy land with faries and elves and candydrop flowers that would be true. This is the really-real world and yes it DOES entitle them to special treatment, thats WHY people work there. Its a fringe benefit, as they say.

  7. zibby says:

    I do a couple “Letters to Santa” every year that the P.O. will give me. Any kid with the berries to ask for a freakin’ $600 (retail) PS3 is getting ignored by me. Especially because they always want like 10 games with the damned thing.

  8. Triteon says:

    This sounds as much like a Sony problem as an EB problem. Five or six games per store…that’s it? The creation of artificial demand by Sony? J’accuse!

  9. AcilletaM says:

    Entitlement IS something from the happy-happy land of faries and elves and candydrop flowers.

    That said, yeah, I think Sony wouldn’t be too happy with this. I’m sure they don’t mind artificial demand but they already have that problem. This is just more bad press about the PS3 launch.

  10. d0x says:

    I worked at EB long ago and yes they did allow employees to buy systems but they DID NOT allow them to get them on launch if numbers couldnt meet demand. For instance we got about 20 PS2’s on launch so only 3 people that worked there were allowed to pre-order them.

    This is more of a store by store basis, if the store manager gives the go ahead then there isnt much that can be done unless the district manager is supervising the launch.

    I wouldnt worry about it, I just got back from the mall and my local Gamestop and EB said they were getting 9 PS3’s and all 9 of them went to customers…i know because I watched them be sold.

  11. This is the really-real world and yes it DOES entitle them to special treatment, thats WHY people work there. Its a fringe benefit, as they say.

    Uh, no, there’s no entitlement there. Entitlement suggests that the employees in question are imbued with some special right to get at Playstation 3 consoles before the general public.

    I’m pretty sure there’s nothing in the United States code related to employment that defines such an entitlement. Furthermore, I am highly skeptical that the employment agreement signed by these individuals upon their hiring explicitly declares their right to the same.

    Entitled to hour wages? Yes. Entitled to benefits such as insurance? Depending on their employement agreement, possibly. Entitled to social security? Absolutely. Entitled to snake consoles before the general public? Show me the language and I’ll eat my hat.

    I’m guessing that an angry memo has been drafted and distributed to all their stores explicitly enjoining employee sale of these consoles. EB will make far margin on the public than they will on employees. With the paltry supplies of PS3s available, I doubt they’ll be too interested in lining the pockets of their cashiers and stock boys.

    The only people who win in this circumstance are the employees. Not the customers, not EB. I’m pretty sure this will get addressed, since of the three parties I just mentioned, employees are the most easily replaced if they cease to add value to the equation.

  12. DeeJayQueue says:

    Well, it’s not as though EB is endorsing this. they’re letting the employees buy the consoles themselves. After that, it’s anyone’s guess what they’d do with them. Hell, some of the people who WORK IN THE GAME STORE might want the system to, i dunno, PLAY IT.
    If Sony wants to create artificial shortages, all OPEC style, then that’s fine. The people with the money will have the new new shiny shiny first, and the unwashed masses will have to wait till wave 3 or 4 to get one. That’s how it works. In 2 years the system will cost $199 and come with 3 games and a steering wheel. In any event it’s not EBs problem. If they were getting 15 consoles instead of 5 then there might be a couple to go ’round.
    I work at a print shop because I get free printing. I worked at a home goods store for the 20% discount. Retail jobs are a dime a dozen, especially once you know how to count money and don’t have a criminal record. The people that work at the jobs made a choice to work there, usually because of the fringe benefits, like having first dibs on new stuff when it comes out. It’s an unfair advantage when there are shortages, but them’s the brakes. If you don’t like it, don’t shop at EB Games, or better yet, don’t spend $600 on a PS3.

  13. Nifle says:

    Dox, how could you watch 9 PS3s be sold to customers before the release date? They may be preordering and getting on a waiting list, but that doesn’t mean that they’ll receive their precious consoles on the day of release. The employees could easily get the first shipment and then turn around and sell them as previously stated.

    My brother use to work for EB Games and this was very common practice. Especially when the Xbox 360s came out. He could’ve made a killing on EBay if he wasn’t so nice to sell his console at retail. (Yeah, I wanted to bonk him on the head for that move!)

  14. dancemonkey says:

    The problem with this article is that a leaked memo on kotaku yesterday says that gamestop/eb’s policy is to only allow 2 employee console purchases PER STORE. Hasn’t anyone put these two posts together and asked someone at the organization what’s the true policy?

    Referenced post is here: http://www.kotaku.com/gaming/leak/rumor-leaked-ps3-preorde

  15. d0x says:

    “Dox, how could you watch 9 PS3s be sold to customers before the release date? They may be preordering and getting on a waiting list, but that doesn’t mean that they’ll receive their precious consoles on the day of release.”

    I meant I watched them buy the Pre-orders, im sorry i was crystal clear despite the fact that it was incredibly obvious what i was talking about.

    Yes those people were —>promised

  16. WindowSeat says:

    Am I wrong in thinking that most people who get their hands on a PS3 in the first round are going to try to sell it on EBay? Who cares who gets them first?

  17. The problem seems to be the low number each store will have, not that the employees will be able to buy them first. Would this even be a story if each store was initially getting 200 units instead of only 5?

  18. Xkeeper says:

    I’d just say “Don’t buy a PS3.” $600 for a game console, not to mention titles like Gran Turismo HD that gouge you with microtransactions (I think the total cost to buy every car and track in the game totaled well over $300!) …

    And it isn’t that big of a deal, especially conisdering that it isn’t anything new. Some company was repressing old games that were experiencing a massive shortage (Disaega?) and EB or Gamestop (one of them) were slashing the brand-new copies open and selling them used, for $80+! (not helped by the fact you can’t tell the new presses from the old one, and the games are remarkably rare/valued)…

    Oh well, it’s just more bad press, as if Sony wasn’t getting enough as it is.

  19. WindowSeat is totally right.

    And anyone who is hating on the EB store employees is probably a hypocrite, because in the same position they would do the exact same thing. At the very least they are whining about privledge, which is something that is a reality in this world. Deal with it.

    This is not a big deal. There is going to be a huge shortage whether or not the 5 frickin systems in your town’s EB store end up on Ebay instead of the hands of some loser willing to sleep outside the mall doors for a week.

  20. Ass_Cobra says:

    Yes those people were —promised— to get their PS3’s on day 1 with no doubt. The store knew their allocation and only took that many orders. Not every store is full of greedy employees.

    edited above to remove html killing brackets

    Dox, you saw them take that many orders. That doesn’t mean they won’t take more later. It also doesn’t mean that they won’t let employees raid the stock. It was well documented that during the XBOX 360 launch the pre-orders meant nothing as retailers forced people who had pre-ordered the system into expensive bundles or else face waiting to get their pre-order filled. Not saying it will happen this time but there is precedent.

    I would imagine that Sony could have a no soup for you policy but who knows if they have the stones to enforce it. No matter what people may think they are entitled to as an employee, erasing customer goodwill to get a first crack at a limited quantity item is not one of them. This is not a moral argument it’s an economic one.

    I work at a print shop because I get free printing. I worked at a home goods store for the 20% discount.

    This may be the case but it’s not equivalent. I am going to assume that if a paying customer has an order in the hopper, your free printing goes to the back of the queue, pun completely unintentional. Of course these guy’s are not getting the system for free, but they are getting the difference in launch price and resale price for free. Anyone with access to an attractive an flirty girl should be able to foil these nerds anyway.

  21. GenXCub says:

    4 or 5 PS3’s per location? That is mere pocket change to the people who do this on a daily basis at Wal Mart and Toys R Us. I’m not sure how many people realize this, but the action figure business changed a few years ago when they started short-packing and adding Variants. The Marvel Legends series is based on this. There are 6 or 7 figures per series (usually each with a piece of a larger figure once you get the whole set), and one or two have variant heads or paint jobs. There are certain figures in this series that have much fewer made and so are “short packed.” Like 1 per case or 1 per 2 cases. The Variants are even more rare. Places like Wal Mart and Toys R Us get many cases per order, so this leaves the little imps in the back room to buy at employee discount and make major bank on eBay. I’ve sold hundreds of action figures on eBay (but I’m not a retail employee), so it always pains me to go in search of these rare figures only to know that they’ll NEVER be on the shelf. Ever…

  22. adultsupervision says:

    One of my cousins used to manage the “R-Zone” video game section at a Toys ‘R Us in Northridge, CA, and the manager of his store would buy all of their consoles on release date and then sell them on eBay or to “premium” electronics stores. He had a shell DBA set up just for console gouging so it wouldn’t be in his name.

  23. ValkRaider says:

    Just solve the whole problem and buy a Wii instead. Better games. Lower cost.

  24. juri squared says:

    The original informant to Kotaku should really call the district manager and inform him of what he heard. They won’t tolerate that sort of thing.

  25. alicetheowl says:

    I’m not sure that EB is to blame in this. Most places I’ve worked where I got an employee discount had a policy that directly forbade selling that merchandise for profit, or even at the same cost you bought it. I signed just such an agreement at Suncoast. Granted, it’s difficult to prove what I was doing with merchandise I was buying, but in a right-to-hire state, they didn’t have to prove a damn thing.

    The year the PS2s came out, a friend was working at Wal-Mart. He bought ours (for me and my husband) and one for himself, using his discount, and we paid him back. He wound up getting another PS2 for Christmas, so he sold the one he’d bought for himself on ebay, and the bidding took it about $50 more than he’d paid. A week later, he was fired for abusing the discount policy. I don’t know how they found out, but they were well within their rights.

  26. netobaron says:

    Well, thanks to the post on on this site early this morning I found out about the preorder and got just in time to be the 3rd person inline at my closest store, which opened 3 days ago and so wasn’t as well known.
    From what I understand the lines were pretty long at all locations!
    I’ll list it on ebay and sell it if I get a ridiculous offer, but will probably end up keeping it.
    I think it’s worth the price tag if you’re a gamer and into HD movies. Not only does the PS3 have the best gaming engine but also comes with a blueray player that retail for about 1K.

  27. NeonCat says:

    Buy low, sell high. That’s capitalism, and if you are against it you are a dirty, dirty communist.

    That includes stores that fire employees for practicing capitalism.

    No one is putting a gun to people’s heads and forcing them to buy a PS3 on eBay as soon as it comes out.

  28. LafinJack says:

    Civil war in Darfur? Boring.

    North Korean nukes? Yawn.

    PS3s on eBay? OMGWTFBBQ!!!

  29. NeonCat says:

    LafinJack, this is Consumerist. I’m pretty sure the Sudanese Civil War isn’t over someone trying to make a return without a receipt, and Kim’s nuke isn’t in retaliation for a bad customer service experience. As far as I know.

    Is it trivial, talking about PS3s on eBay? Sure, but it’s OUR trivia.

  30. I think it’s worth the price tag if you’re a gamer and into HD movies. Not only does the PS3 have the best gaming engine but also comes with a blueray player that retail for about 1K.

    Oh yes, because all those wonderful Bluray movies and PS3 games make it a steal at $600…you work for Sony, don’t you Netobaron?

    I got two words for you..RIDGE RACER!

    http://www.youtube.com/watch?v=IH2w2l1JTs4

  31. Ass_Cobra says:

    Buy low, sell high. That’s capitalism, and if you are against it you are a dirty, dirty communist.

    That includes stores that fire employees for practicing capitalism.

    No one is putting a gun to people’s heads and forcing them to buy a PS3 on eBay as soon as it comes out.

    I’m certainly not going to fault an employee for doing so if the employer allows it, I’m going to think the store is stupid for not trying to satisfy customers. The idea that an employee somehow morally enjoys a first crack at merchandise in the store is ridiculous however. Benefits like first dibs and employee discounts are given to compensate employees. Unless contractually agreed to employers are well within their rights to revoke them as they see fit. Employees are likewise able to take their skills elsewhere if they feel they are undercompensated. That is capitalism.

  32. Xkeeper says:

    RIDGE RAAAAACEEEEEER?

    Meh, I prefer GIANT ENEMY CRAB.

  33. SpamFighterLoy says:

    I hate italics.

  34. crankymediaguy says:

    OK, has anyone noticed that the name of this website is CONSUMERist, not EMPLOYEEist? This practice on the part of these stores is anti-customer.

    Yes, having worked retail myself, I’m perfectly aware that those jobs suck. That should be remedied, but not at the expense of the customers. It is NOT right to allow the employees to buy up all the units and leave none for the customers, no matter WHAT the product might be.

    Given that this is apparantly Standard Operating Practice with these stores, give me a reason why anyone should patronize them. After all, they don’t seem to give a rat’s ass if you are trying to give them your money.

  35. John Stracke says:

    Triteon, I don’t think Sony is creating artificial demand on purpose. The PS3 shortages expected are because there’s a shortage of the blue LEDs needed for Blu-Ray and HD-DVD drives. If Sony could do anything about that, they would, because they make Blu-Ray but not HD-DVD; having lots of Blu-Ray drives available, but no HD-DVD, would be good for them in the format war.

  36. Buy low, sell high. That’s capitalism, and if you are against it you are a dirty, dirty communist.

    That includes stores that fire employees for practicing capitalism.

    Er.

    Not so much.

    The central tenet of capitalism is free choice. Including the freedom to choose with whom one does business. EB and Sony get to choose their customers. They should and will choose the most profitable customers for them. Employees are not the most profitable customers because they’re savvy enough to understand the true market value of the device they’ve purchased and not use it for themselves.

    Conversely, the average consumer is a better customer because he doesn’t give a damn about eBay. He cares about his stepson who he really wants to get along with and the PS3 might just be the ticket. So he’s going to buy the console, plus a bunch of games, plus controllers for Johnny’s friends, plus the strategy guides in case Johnny gets stuck, etc, etc. All that action is margin, margin, margin. The likelylihood of the employees making that quantity of high-margin purchases is light because there’s very little inflated demand for accessories, which often don’t experience nearly the same supply shortages as consoles themselves (this depends upon the manufacturer but was almost always true back when the last generation launched between 00 and 01).

    If this thing has to be purchased on eBay, EB doesn’t even get a shot at attaching these accessories at time of purchase, which is when they have the greatest chance of succcess. EB loses and so does Sony.

    And that’s bad business.