Best Buy Accused Of Paying Bonuses To Managers Who Don't Price Match
In a new class action ruling (pdf) for a Best Buy price matching lawsuit, HDGuru has uncovered some unpleasant allegations against the company, including:
- Best Buy provided financial bonuses based, in part, on denying proper price match requests.
- Best Buy denied more than 100 proper price match requests per store per week.
They even circulated internal documents instructing employees how to reject price matches—see below for the partial text of one of them.
Here's part of an internal document from Best Buy's Competitive Strategies Unit which instructed Best Buy employees about their real "price match" policy:
"Price Matches
It looms on the wall, on a 9 foot sign. Our Price Match policy. There it is plain as day in English (Y en espanol para los de usted que puede leerio.) However, just because it is our policy, do we abide by it? Does it really help the customer?
What is the first thing we do when a customer comes in to our humble box brandishing a competitor's ad asking for a price match? We attempt to build a case against the price match. (Trust me, I've done it too). Let's walk through the "Refused Price Match Greatest Hits:"
Not same model? Not in stock at the competitor? Do we have free widget with purchase? Is it from a warehouse club (they have membership fees, you know)? Limited Quantities? That competitor is across town? We've got financing! Is it an internet price? It's below cost!"
As HDGuru.com points out, the public price matching policy as recently as this weekend read, "We'll meet or beat their lowest price. If you see a lower advertised price, we'll match it on the spot."
As for the lawsuit, it's for New York state residents only. Here's more info on it:
The HD Guru contacted Michael Braunstein, the attorney representing the plaintiff in the class action lawsuit. Mr. Braunstein invites readers who believe they have been "murfed" (refused the price match in compliance with BBs written policy) or have inquiries regarding the class action, to contact him by email or phone. The class action lawsuit applies to NY State residents only. However, Mr. Braunstein stated in the phone interview that he would like to hear from anyone who has been rejected for a price match by Best Buy, regardless of the state in which they reside. His contact information is Michael L. Braunstein, Kantowitz, Goldhamer and Graifman, P.C. (845) 356-2570; email mbraunstein@kgglaw.com
"Best Buy Bombshell!" [HDGuru.net]
(Photo: insanehank)
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Comments:
How does a company get sued for not enforcing its own price match policy?
Surely price match implies that the customer is more than welcome to purchase the product from a competitor?
I don't disagree that this is shady, but I am genuinely curious as to who would be paid off if this law suit was won?
Yeah in BestBuy's policy it's in there that they won't price match sales items on Black Friday.
I love when best buy doesn't want to play fair. I tried to get them to price match a TV based on one I found online and they had nothing to do with me. I asked to see a manager and ordered the tv for over $400 less than what he wanted right on my phone in front of him. He didn't seem to care much until I told a few couples looking at the tv to go online and save a few hundred dollars.
@aguacarbonica: No. Price match implies that the store has the lowest price guaranteed, or will match the competition's price (or better). The whole point is to get you to spend your money at Best Buy, not the competition.
@Crystal Watkins: I once had a Best Buy employee tell me "the price match is only valid if you get the extended service plan". At an extra $75.00 it more than compensated for the price match of a few bucks.
So I do tend to believe this post more than disbelieve it, based on my own experience.
Oh and don't forget the time I "had" to buy the recovery disks for that laptop on sale in the Sunday paper!
Agreed that this seems shaky. They bonus off of revenue and margin, which of course is affected by price matching, so certainly it's in their best interest to avoid following the policy. That said, I don't think they directly track that - they don't have a mechanism.
As far as those corporate instructions go, their policy specifies same brand and model so refusing on those grounds is legit - and teaching your managers to follow the policy is fine. Though "It's below cost" certainly shouldn't count - tough for them if it is.
Of course, there's nothing wrong with managers bending the rules to make a good customer happy, but I don't see a lot of fire here.
@Crystal Watkins: Before who defames them? They aren't the ones making the allegation. They're just quoting what two former Best Buy employees have said.
I don't know how they kept track but if BB was awarding bonuses based on not price matching the employees must have had to do something to prove they denied a price match.
I've tried to get Best Buy to price match two times. Both times they did so. The second time was related to a competitor's ad that had a sale price plus a gift card. Best Buy matched the ad's price and also reduced their price by the amount of the gift card. Both price matches compared favorably to Amazon's price.
Obviously it doesn't always work so well, but it isn't always a fiasco, either.
@Crystal Watkins: You're right. Best Buy probably doesn't do these things, and the people who have complained about it are just making it up or confused.
I'm never one to play the whole "Facebook commenters are a bad idea" card, but once in a while I kind of want to.
It seems like everyone who complains about Best Buy's price match policy are price matching some internet website.
"If you are about to make a purchase and discover a lower advertised price offered by a local retail competitor on the same available brand and model, let us know and we'll match that price on the spot. "
that is EVERY retailer's price match policy. Why should a retail store have to match online websites that operate out of a warehouse with a 2 person staff that probably isnt even an authorized retailer for that product you're buying?
The bonuses are based off of Revenue and Margin...just like bonuses from every other retailer out there. I am not going to discount $400 off a $1000 tv just so you i can NOT follow policies and match www.mramazingplasmadeals.com . Cheap people...like the ones complaining are the reason why our economy is in its current state. You keep wanting to buy stuff, but you keep wanting that stuff for little to no money. IF YOU CAN'T AFFORD THAT TV, DONT BUY IT.
So knowing the insides of the company. I can tell you one thing...tracking any price matches does not exist, it was never available and it never will be. So there is no way bonuses can be given out on numbers that can't be tracked. Managers and supervisors bonus from margin and revenue and THAT'S IT. Sure a lot of price matches are turned away, but they are legit reasons when they are turned away. That memo that is posted in the OP pretty much summarizes bby's price match policy that is already available online in proper English. Now if one store (the oddball) wants to make it their mission to stop price matching and make it hell for every customer that walks in...then they should be dealt with by their district staff. In general most stores abide by the price matching policy.From first hand experience bby does a lot of shady stuff...but not this...
@aguacarbonica: If you read through, it's "false and deceptive trade practices" that they've been sued for, and various violations of NY State business laws.
Class action means the payoff will go to all members of the class -- which is defined on page 2 of the filing. (Short version: Everyone in NY screwed by the price match policy out of getting a deserved price match.)
@masterying01: O I don't know, maybe they want your business. Amazon isn't some new fangled phenomenon anymore, its a normal store just like anything else. They sell things at the retail level, therefore, they are a retailer.
Almost all the things in the memo are listed as exclusions on their website:
The Price Guarantee does not apply to our or our competitors' free offers, limited-quantity items, items for sale November 28th & 29th, 2008, open-box items, clearance items, Outlet Center items, mail-in offers, financing, bundle offers or pricing errors.
The only one I don't see is warehouse clubs, but they do limit the policy to local retail competitors, so they could argue that warehouse clubs are wholesale, not retail.
I don't see anything that they won't PM if it's below cost, so if someone has a PM denied on that they have a legit gripe.
Just dropped on the floor and left huh?
Is that how you were brought up to react to a disagreement?
Why is it always so acceptable to slam retailers for their practices but customers are allowed to pull this kind of crap.
Personally I would have banned you from my store. And yeah, I'm sure you would have replied with something like "I wouldn't give you my business anyway". I hear that on a regular basis from scammers and then see them back in my store again a few weeks later. Apparently many people's word and honor has a direct relation to how far the closest competitor's store is and how low my prices are.
Don't get me wrong, I'm not defending Practices like what Best Buy is doing, but what I'm saying is don't slam them for being a tard if you're being an immature tard yourself.
How hard is it to just disclose the exceptions in some tiny type?
Item must be the same model in competitor's ad and in stock at the competitor's location. Competitor must be within a X mile radius of the BB location. BB does not price match warehouse club or online vendor prices. Price match does not apply to items in Limited Quantities or items that include another item/service free with purchase.
I left out "below cost" and "we've got financing" because those excuses don't make sense even when disclosed.
Again, you guys are choosing what to read and what not to. There are people who argue Amazon is a retailer. You're right. But the policy says LOCAL retailers. Websites are not local. Maybe opening your eyes and reading the whole thing would help?
Most people that want to price match BELOW cost are price matching from online websites. So...again...NOT local retailers.
Costco And Samsclub carry a lot of stripped down models in their electronics section. a 40" Sony LCD at costco is a stripped down model with different/lower end features then a KDL40S4100 at Best Buy. Why should Best Buy give you the better Television for the price of the stripped down one?
There are some ignorant people out there.
I was in Best Buy this last Friday looking at stereo at their Lake Pleasant location in Arizona. They had it on clearance for $202, but they didn’t have any models left except for the floor model. The guy was nice enough to let me know that the store on Bell & Grande had 3 models left.
I made the 20 minute drive over and there it was! But the price was $268 at that store. I asked the manager to price match the other Best Buy and he gave me some strange excuse that they couldn’t do it because the other store’s price was based on volume or something.
I asked if they would transfer the radio to the other store, and they said yes. But I had to drive back to the other store to do it.
I was willing to fork over the money right there on the spot, but they wouldn’t let me spend it.
@ekzachtly: Whoa there! Do you know who you're talking to? That's Crystal effin' Watkins!
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By the way, as someone who put in his time at a Best Buy for a summer or two, this sounds about right. Unfortunately, since my manager was incompetent, I never knew any corporate policies but I do recall being told many times to convince someone seeking a price match that it was in their best interests to pay more.
@Scatter: You sure he didn't mean he let the argument drop? Do you sell figures of speech in your store?
@Supasam83: You're telling me that Best Buy or any store has a policy that changes the price they offer to a different, lower, price but they don't know when or if it happens?
They absolutely know. There's a reason why it's a special modification and the register even asks what store was matched. I'm sure it works like theft and loss, and all they have to do is beat an average or predicted number.
@Eyebrows McGee (on Twitter: LPetelle):
Agreed... (Hey ! The response feature is fixed. For now.)
Why would anyone be so stupid to put this in writing ? Plausible deniability is not just for old episodes of Mission Impossible.This is something that you rarely say out loud and NEVER write down...
@masterying01: Unless your store has $400 of value-add, me paying $600 online for a TV instead of paying you $1000 for the same TV is smart, not cheap.
I think there's a case to be made for supporting local retailers even if they're slightly more expensive, but that's a big discussion for some other place (especially because we're talking about Best Buy here, not Joan & Dave's TV and Appliance).
I don't understand the 'it has to be in stock at the competitor' requirement. I have stalked products before when i know it's cheaper somewhere and wait for it to come in stock. a place just lost my business if they don't price match because i would have walked out today with it. instead, i now wait until the other place has it in a week. and for big ticket items that sell out instantly...sure i could have gone to walmart early in the morning as they open but i decided to come to bestbuy.
The registers know of the price match because of what you mentioned and also the need for an override. No retail store I've ever worked at has done the metrics of price matching to the point of knowing which individuals do it. In fact, best buy could not do this because the people ringing up the items are often not the floor sales staff who helped the customer.
@KyleOrton: Consumer tip: Just don't bother with price matching. Find a company that has the price you want and shop there.
@FDCPAGuy: So there's no way to look at a transaction record and determine an item was price matched?
I would think if you look at all the transactions where price overrides have occurred (Which I believe only managers can do at a big box, might be wrong), you could determine which ones were price matches.
Back in early 2006 I went to my city's BB for the first time, there was a DAP being sold at an advertised price--and the last one was an open box model going for $12 over the advertised price. I picked it up and asked about matching the ad flyer to an associate, which he said it was possible. When I went to the counter to purchase it, the clerk was insisting that the open box was not covered. So, I was about to leave and the manager rushed to correct the clerk, apologizes to me, and knocks off an additional 10 percent from the advertised flyer price. I left the store with the music player, and I did not raise a stink (very odd).
(I learned later, that the ad's fine print states that open-box products are not covered in the advertised pricing. Very lucky.)
I still think BB's shenanigans will catch up to them soon.
@FDCPAGuy: They don't need to know who. The manager is in control of the whole store, so they can look at the storewide level.
And supervisors are in charge of all pricing in their section. Simple as that.
@dragonfire81: He admits they know what was price matched and by how much, he's just talking about who authorized it or "sold" the product.
@Alex Santa Maria: Amazon isn't some new fangled phenomenon anymore, its a normal store just like anything else.
This generalization is wrong and ignorant. Amazon is NOT a normal store in that they have dispersed inventory, subretailers taking on cost, etc. They are a normal part of the shopping experience is what you should have said.
Until Amazon has to pay for storefronts nationwide, they are simply a middleman with a URI.
The plaintiff in this case was trying to price match a camera he bought at Best Buy for $1999 to an ad for $859, over a $1000 difference, which I think anyone would be hesitant to do.
Best Buy refused so he returned it and paid the restocking fee and then bought it at the other place. So really his only damages are the fee, the 10% guarantee (since he already purchased the item), and maybe gas. That's assuming they can prove that the other place ([www.tristatecamera.com]) was legit and the camera was exactly the same.
I don't think there are going to be a lot of other people who can demonstrate real damages from Best Buy not following the policy, as most people who were denied the match would do the smart thing and just buy it where it was cheaper in the first place.
@Crystal Watkins: Defame BB? HAHAHA! Several times a month, there is a story here about this exact same thing. You can't defame BB on this issue, it is COMMON KNOWLEDGE!
I'm curious how the plaintiffs are going to prove this happened to them personally. Receipts for the purchased item from BB or different store (refused price match)? E-mails or Phone records proving they contacted them. **Proves you need to complain, even if it does not work, it may be helpful in the future!** Especially if they don't respond, it may help win a class action lawsuit!
and the manager that is in control of the whole store bonuses off the same metrics as the Assistant managers and supervisors. Margin and Revenue...that's it. price matches are not tracked at all...in any way.
@aguacarbonica: False advertising, Bait and switch, Unfair business practices... etc, etc, etc....
Fine their butts and require them to conduct business fairly. That's how we win! (I am not party to it, but I would win here!)














How is that even possible to track. Leads me to believe this is fake. Might wanna check into these things before you go and defame them.