Tuesday, 17 March 2009

Best Buy gift cards are a pig in a poke

AS BEST BUY gives with one hand, it takes away with the other.
Once upon a time, Best Buy became the first Big Box store in the States to ditch its mail-in rebate program, instead giving "instant saving" to buyers. Previously, anything marked up for sale could have a complicated set of in-store rebates, company mail-in rebates, and manufacturer mail-in rebates.

Best Buy turned its mail-in rebate program into "instant savings", so there's one less set of receipts and envelopes to deal with when you try to milk out the last couple of bucks. You still have to deal with manufacturer mail-in rebates, but that's no big deal.

Best Buy also has a Frequent Buyer programme - it calls it "Reward Zone" and it is like many other such schemes. You buy something, you whip out your card to be scanned, you get points for the amount of money spent, and Best Buy mails you $20 discount coupons every time you spend so much cash. If you don't mind the fact that Best Buy doesn't have a wide selection of gear, typically buy brand-name products, and like the convenience of walking into the store to purchase and return kit, it's a decent place to shop. I had a TiVO die on me about nine months into warranty; Best Buy took it back, no questions, just pulled another one off the shelves, and thank you very much.

Best Buy is also going to try to give other advantages to "Reward Zone" members. Next Sunday, it's going to have a "Private Shopping Event" around the US. From 7:30 PM to 9:30 PM, there will be a "give away" to the first 100 customers, "Product demonstrations on great new technology" and a $50 dollar gift card drawing will be held every 15 minutes. Oh, and I mustn't forget that it's double points on all event purchases and triple points if I spend $2,000 or more!

Shame I'm not shopping for a plasma display HDTV, since I could rack up a lot of points that evening. I don't need the product demonstrations and I suspect the "give away" will be something like 256MB memory sticks or something equally worthless and gathering dust. It will also be interesting to see what kind of bargains are in the Sunday ad inserts. Will I get a good deal and double buy points?

Unfortunately, Best Buy has changed its policies on its return/display model gear. Once upon a time and up until a couple of weeks ago, you could find an open-box special simply marked down from the current list price. Very simple, you looked at the discounted price, how long the computer or monitor or printer had been sitting on the shelf, and decided if you wanted to buy it or not. Those days are gone, at least for now. Instead, you now pay list price for a display model and get handed a Best Buy gift card with a proportional dollar amount between five to 30 per cent. So if you bought a $300 printer, you might get a $20 gift card. An $1,100 list price computer yields a $300 gift card. It's an accounting gimmick, so it can show it sold off the unit at full market price in one column - boosting total dollars on the revenue sheet - and then can hand back dollars as a marketing expense. Gift cards also work because they make sure you have to come back to Best Buy to buy more stuff and they also get some of the money "back" if you don't spend the full amount on the gift card - all of it if you lose or forget about it. ยต



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