Wednesday, January 09, 2008

Re: Caveat Emptor

One more thing from the Joel article on the "sins" created by the motivation of a sales commission, regarding a customer "returning" an extended warranty (just the warranty, not the product it covered):
The manager acknowledged that CompUSA's returns policy covered an extended warranty (which, as everyone knows, is almost all profit for a retailer). Still, the salesperson objected.

At first, I thought that the customer had been duped into buying a warranty she didn't want and was trying to return it, so it was unclear why the clerk was giving her such a hard time. But then I realized that the argument was over the fact that the salesperson had given the customer a discount on the merchandise, paid out of his own pocket. In exchange, the customer had agreed to buy the extended warranty, which would have resulted in a nice bonus for the clerk. Now she was returning the high-margin warranty while happily pocketing the discount. The customer had double-crossed the sales clerk!

That is hilarious. I hate extended warranties, which are notorious for being the most profitable item in the store. I remember once I was at Best Buy, purchasing a refrigerator (famously long-lived appliances, the last thing you would want an extended warranty on), and I had to interreupt the sales girl's spiel 3 times, to insist I wasn't interested in hearing it. She got into a mild argument with me about how could I make up my mind without hearing her out?

If she were more experienced, though, I think she would learn that there is no point arguing, you will never change the mind of someone who is onto the game, and willing to interrupt you mid-sentence to let you know that. You are wasting your time, in addition to pissing him off. The sales pros learn this. The problem for retail is they have rank amateurs. Given the high turnover, almost nobody becomes more experienced.

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