Best Buy's Bad Business


VARs Should Cash In On Services Shortcomings


Best Buy made its name selling technology products at the lowest possible prices. Of course, the best prices don't always mean the best service.

To that point, Best Buy has always had trouble providing technology services to consumers, businesses or any class of customers. That's why the local solution provider channel has thrived from its inception in the early '80s. And it's why there will always be a place for the local solution provider.

With technology product sales plummeting, the retail giant is making a big push on services. In fact, Best Buy's new CEO, Brian Dunn, sees services as the future for the company. In the most recent quarter, Best Buy's comparable domestic store sales were down 4.9 percent due to what the retailer called a decline in customer traffic. Interestingly enough, the sales decline was partially offset by what Best Buy called gains in notebook computers, mobile phones and repair services.

So are Best Buy's Geek Squad techs being pressured into making repairs that are flat out just not necessary? It's a question worth asking given the experience of one of our esteemed editors, Scott Campbell, and a number of other consumers complaining about the Geek Squad. To get the full impact of the services shenanigans, go to Campbell's blog post on our ChannelWeb Connect community at community.crn.com. Here is a short summary:

Campbell's wife bought him a $700 Dell laptop in January for his birthday. She also decided to go the extra mile (better safe than sorry) and buy the Best Buy three-year, $300 "Black Tie Protection" warranty. How much margin, by the way, does Best Buy make on this "Black Tie Protection" warranty plan? My bet is it's a lot more margin than it is making on the Dell laptop.

The Black Tie black eye for the Campbell family came after only five months when the hinge on the Dell laptop came loose. Campbell brought his Dell laptop back to Best Buy, which agreed to ship it out and return it to him in three weeks. How in the world can you justify a warranty that does not provide a one- or two-day turnaround in this day and age? Three weeks. Are you kidding me? What exactly are you paying for if you can't get a repair done in 48 hours?

We've already proven that the $300 Best Buy "Black Tie" warranty isn't exactly a barnburner. Then Best Buy's Geek Squad replaced the hard drive without so much as even a heads up to Campbell. To top it all off, Campbell proceeds to get a phone call from another Geek Squad rocket scientist asking if he wants to buy data recovery services from Best Buy.

There is no way any local solution provider could provide this kind of service and last more than a month.

From this vantage point, it looks like there is a lot more bad business than best buys at Best Buy. And it's that bad business that is sure to lead more customers from Best Buy to solution providers.