Hi All,
For those of you who want to shop at Future Shop, it is important for you to know what is the reason this company chooses to ditch an honest customer. Here are some of the reasons for that.
Future Shop model of operation is based on deceiving the customer. They don’t have a sustainable value preposition, (reason to exist) other than the fact that they have pushy sales model.
The company has been bought out by Best Buy who would rather see its own name propagating then a local brand name such as Future Shop which only exists in Canada.
Best Buy has non-commissioned sales people and they are able to sell as much stuff as Future Shop if not more. This puts real pressure on Future Shop management to prove its existence and justify commissions.
If Future Shop drops commissions, they will offer nothing different from Best Buy. Which means it loses its existence.
Now a word about commissions:
I get laughs when I see the employees of the company trying to defend Future Shop and themselves. I will be honest and clear: It is not the salespeople who are at fault. They are only doing what works best for them. If you are a smart salesperson, why wouldn’t you look after yourself.
But it is the company’s compensation model which helps everyone except the customer. Let me give you an example.
Buying a Laptop:
If you sell a laptop, the average commission on the laptop is $5-$15.
If you are a serious salesperson, you will be lucky to sell 5-7 laptops in a day depending on the store.
This means you would make $50 per day on average. Obviously this does not fill your wallet. Now let us start building on the add-ons and see what happens
Warranty: PSP, PRP pays you 12% commission. A laptops warranty is uptop 40% of the purchase price. Lets say it is $300. You have now made an additional $36 to bring your commission on the sale at $36+10 (avg) =$46. That sounds better. But wait, since the customer is buying why not go for more. This is just the beginning.
Why don’t you sell the setup (which is truly setting the customer up)
The setup costs $150 (with software). That pays you 15% = $20
Now you are at $66.
What about the bag: A $50 bag will pay you $5. So now you are at $71. What about mouse $5. At this point the customer starts to give up.
After all the $800 laptop has now grown to $2000.
So now you made approx. $80 from the sale.
Obviously, why would we blame the salesperson. I think he did a fantastic job. But what did the customer gain.
Let’s see:
1. Warranty: The futureshop’s warranty is smartly designed to confuse and dupe the customer. I will explain all salient features with the context of the laptop sale.
1. Performance guarantee: This is nothing but a piece of shit statement: (Performance guarantee ensures that the product will perform according to the manufacturer’s specifications). Doesn’t the manufacturer meet his own specifications. Ridiculous counter cyclical argument to confuse the customer. BTW, I had broken my keyboard and called up LG laptop. They paid for both way shipping and replaced keyboard within a week, no questions asked. Try that with Future Shop.
2. Replacement Guarantee: This guarantee is only meant to help 2 kind of people
a) Those who are extremely unlucky
b) Those who are clever at fooling the company and paying it back in the same coin.
For example,
The terms and condition of the replacement guarantee state that the laptop would have to have 4 major repairs in order to be considered for replacement.
Here is the problem with this.
a) 4 major repairs: Adapter replacement for example is not a repair. It is upto the company to decide whether it is a major repair.
b) Each time you bring for repair, average repair time is 15 days. So you are without the laptop for
Atleast 2 months in the warranty period before you get a replacement.
Despite such heavy odds in the company’s favour, here’s what happens when you get the replacement
a) Your warranty is now no longer valid. If you bought a 3 year warranty and the replacement happened in 13 months. You lost the remaining 2 years. Considering you already had a 1 year manufacturer warranty, you have in-effect paid $300 to exchange the replacement.
b) Future Shop will again sell you the new warranty on the replaced laptop, which means you shell out another $300 which means you effectively paid $600 to replace your laptop
c) The defective laptop is a property of Future Shop, which they will use for parts or sell it after repair at discount price which could easily fetch them $400-$600. You could have yourself sold the parts on ebay and earned $200. Since you lost that opportunity. You have effectively paid
$800 for the replacement laptop.
d) The replacement laptop will always be cheaper than the original price so you may end up with a $500 laptop at time of replacement. In a best case scenario, the company cannot offer you more than $800 which was your original price.
Based on the above points, if you were the lucky one to have beaten the odds (1 in 100 approx) and qualified for a replacement laptop, you have still paid $800 for a $500 laptop.
The Dilemma: The salesperson makes money by selling you the warranty. The manager makes money by saving on the expenses, which means denying or avoiding the costs of repair/replacement.
When you as a customer are facing such hawks, you are almost always a loser. It is better to keep the money in your pocket and use it to shell out when you need to.
3. Repairs: More than 60% of laptop or computer repairs are software related, and even if they are not, the technicians like to believe they are. When you take your computer for service. If the problem is not obvious (CD burner not working) they will guess it as a Operating system problem.
Instead of telling you to restore the computer yourself, they will tell you that the system needs to be restored and is not covered under warranty (Surprised!). Most customers end up shelling $80 for the restore even if they had the warranty.
Setup: The notorious Future Shop setup is also similarly heavily priced.
The Salesperson will pitch it to you as if it take 4 hours to complete the setup. What he/she doesn’t tell you is that the technicians are doing 20 different things at the same time and not sitting on your computer for 4 hours. They are effectively only spending max. 20 minutes on your laptop. At $100 per hour for setup. They are effectively charging you $400 per hour for the labour. Not bad for a half-qualified technician who follows the default commands which you could have done yourself. (Sometimes the company uses Co-op students to do the setup, training at your expense)
Also, the setup is non-refundable. So if you decided to return the laptop next day, you will now lose $100 because that is the labour fee.
I think I may be running out of space. If you like my inputs, please comment and I will add more.
Post all you want
Left by Admin on July 10th, 2009