Judge Judy certainly has a way with words, and these retailers certainly try to use them to make a lousy deal or non-deal seem beneficial to consumers.
Example #1:
Best Buy recently unveiled a buyback program whereby purchasers of certain electronic equipment can buy a policy that guarantees a certain trade-in value for their new purchase.
*MOUSE PRINT:
Their ad only promotes the best case scenario — up to 50% back. When could you get 50% back? Only  if you want to get rid of your purchase within six months of purchase. More likely, you may wish to trade your item after a couple of years of ownership. In that case, you will get zero back for your phone or computer, and only “up to 10%” for your TV. In our opinion, most consumers would be crazy to PAY a company to offer you a lousy buyback price or no buy back at all during such a short period of time. Selling the item yourself on eBay or through Craigslist would more likely yield a greater return on your purchase.
Example #2:
Earlier this year, Office Depot promoted TurboTax Deluxe with a free state tax download.
*MOUSE PRINT:
What Office Depot didn’t tell you right there was that they added $10 to the price of TurboTax Federal in order to offer the “free” state download:
Bottomline: they are giving you NOTHING extra for free, they are charging you $10 extra for that supposed free benefit.
Sadly, BestBuy’s going to have some takers for this program. Really who trades in a 6-month old tv (unless it’s broken)? And if you are going to trade it in, will you do it for just 50% of the price? So basically you’re paying 50% to rent for 6 months. I think even the criminal rent-to-own people are envying Bestbuy for this program.
And Office Depot wonders why it’s going out of business
Given all of the reports regarding Best Buy’s advertising and not living up to its “offers” to consumers (the price match guarantee, for instance, which was exposed as something employees were instructed to avoid doing), it’s a wonder anyone shops there anymore. I have seen and read too much about their anti-consumer tactics to trust them – which is too bad, because they have a lot to offer in the product department.
That Best Buy one just sounded suspicious from the start. I didn’t even look into it to know that there had to be something wrong w/ that offer. Just the very limited info given in the TV ads I’ve seen sounded like it was something that would seriously hurt Best Buy’s finances if it really lived up to the hype. Nice to see I was right on that one. Pay to get ripped off? Priceless…
The TurboTax is so funny and sad at the same time. Whenever I see “X% More Free” on any product at the grocery store I always find the regular and compare the prices. Too bad software works the same way.
“NOTHING extra for free” hmm? Wrongo!
You do get something extra for free: the state download, this costs $20 so the version with a free state download is actually $10 cheaper.
I agree with Fnord on this one. The Turbo Tax offer was a valid one — essentially it was $10 off the cost of a state download. I do consumer advocacy for a living and this wasn’t a rip-off.
Edgar replies: Michael and Fnord… The store sells Turbo Deluxe Federal for $49.99. They sell TurboTax Deluxe Federal and State for $59.99. The consumer is paying $10 extra to obtain the state portion, rather than getting a “free state download” as Office Depot represents. If the product shown on the right was $49.99 and included state, then, yes, state would really be free as advertised. But that is not the case here. It is also irrelevant what the regular price of the state portion is.
Thanks Edgar. It get it. The offer on the left shows the software at $49.99. On the right, for $10 more, you get the Federal and State. So effectively, they are charging you $10 more for the combination, rather than getting the state for free.
So what I hear you saying is that the consumer isn’t getting it for FREE but, instead, is getting perhaps a $10 discount off the state download. And rather than saying, “here’s a bundled product that you get for $10 less than the two parts individually” they represent that the state download is FREE.
Edgar replies: Exactly right. (I edited the post to hopefully clarify what Office Depot did.)
Dell has had a similar program for some time now. Think of it from the perspective of a trade-in.
Example: When you go to trade in a vehicle for a newer model, the Blue Book value that the dealer will offer you is less than what the Blue Book value is for a direct sale. This is due to the fact that the dealer must either resell the vehicle or send it off to auction with the possibility of taking a loss on the transaction.
This is how a business stays in business. They pay you to take in your used item and then must make money on the sale or disposal of it. If they are smart, they are investing the fees paid to them at the outset for this program to cover any potential loss on the eventual disposal.
Nowhere will you get a trade-in or sale to a dealer at 100% of the value of the item. Yes, it’s not a very good deal for you, but if you are the type of person who always has to have the latest and greatest and are not inclined to take the initiative to sell your older stuff on eBay or Craigslist then this type of offer might appeal to you. Otherwise, you are indeed the smart one by refusing it.
Best Buys buyback for TVs doesn’t make any sense. If you look at the price of the program for TVs and what you get back some people will just be paying Best Buy extra for nothing. You get up to 10% back so if you pay $1200.00 for a TV and pay 179.99 for the program you get $120-$179.99= -$59.99. So, basically you’re paying them $180 extra now to get $120 back in the future. Sounds like a great deal!!
TVs $499.99 or less $59.99
TVs $500-$1,199.99 $99.99
TVs $1,200-$2,499.99 $179.99
TVs $2,500-$4,999.99 $299.99
I bet these buyback programs are sold like the extended warranties that stores push on consumers. They’re paper products with zero inventory, distribution and storage costs and highly profitable. When I bought a widget at Home Depot, I was led to a quiet area of the store and the salesman wouldn’t hand the widget over but badgered me about the $179 extended warranty and this went on for a while until I told him if he won’t sell it to me, somebody else will. I try to buy as many widgets as I can online today.