Six Ways Big Business Screws You

by Mike Shea on 28 December 2006

Nothing becomes so clear during the holiday season as the way big business is screwing people. This is their season. This is the season when all that poor management the rest of the year can be replaced with a huge bottom line all built around the tradition of people buying crap for other people that they don't really want.

So during today's holiday cheer, I thought I would write up ten ways big business is screwing you.

  1. Gift Cards

According to Consumer Reports, 19 percent of gift cards aren't used within the year of their purchase. That's a 19% pure profit gain by the company selling the gift card. There is no advantage to a gift card over cash and many disadvantages. Gift cards sell for face value yet restrict what was once cash usable anywhere to credit usable only at one store. Best Buy earned $43 million dollars in unused gift cards in 2006. Home Depot earned $24 million.

Last year, gift cards were the number one most requested gift by women and accounted for $80 billion dollars in 2006.

Just Say No to Gift Cards. Just give them cash or a check. Write "for scrapbooking" in the "memo" line or something. Next year, instead of giving someone a gift card, I'm going to write them a note saying:

"Happy Holidays. On behalf of our friendship, I donated $50 to Best Buy. Smile and sleep safely knowing that our giant American megacorps will have a higher profit this year."

  1. Extended Warranties

One of my favorite experiences this month was standing in line outside a Circuit City waiting to buy a Nintendo Wii with twenty other angry cold guys when the store manager tried to sell us all on the extended warranty. He tried to tell us that throwing the Wii remote would be covered. How much was the warranty, I asked? $90. How much are the Wii remotes? $30. "So I have to break four Wii remotes before I pay for the cost of the warranty?" I asked. He threw his hands up and went back inside.

When did it become commonplace to extend the cost of an item by up to 20% for some sort of fuzzy ghost-like guarantee?

Extended warranties are a ripoff. They're an extended sales tax - free money given to giant megacorporations with barely any payoff to a consumer. Consumer Reports recommends avoiding them. I think they're a good reason to stand outside of Best Buy with a pitchfork and a torch.

  1. Searching Your Bags

When did we sign in a law that gave Best Buy blue-shirts the authority to search our bags without probable cause? When did we, as a people, decide that it's OK to wait in another line so that Best Buy can violate our civil rights?

I didn't steal anything. They didn't see me stealing anything. They have no shred of evidence that I stole anything. I purchased my items. They're mine now. Now I want to leave and I don't want to have to wait behind ten people showing their possessions to a tough-guy at the door checking receipts.

Screw those guys. Just walk past them. You fulfilled your duty as a consumer when you paid for your goods. You owe them no further waste of your time.

  1. Supply Shortages

Sony and Nintendo got more advertisement from people getting shot than it paid for on TV. I don't know if its true that there was a supply shortage of the components of a system, although it makes little sense for the Nintendo Wii when you consider how old the technology is. These guys could have started earlier or waited longer before release. Don't make your customers wait in the cold to be the lucky one to draw number 7 of 15 so they can spend $250 of their own money on a device that cost about $150 to make.

Shame on me for waiting in that line, no matter how much fun it was at Christmas. The more we tell them that we're willing to wait in line and have a million news stories written about us, the more they will continue to reinforce the behavior.

  1. Mail-in Rebates

I bought a new router a couple of months ago for $50 including a $30 rebate. I xeroxed the receipt, filled out the form, and sent the whole thing in. Six weeks later I received a note saying that my submission came outside of the rebate period. The store advertised the rebate. They gave me the form. I'm pretty sure the date was right. Am I going to go through the trouble of digging up all the information and resubmitting again? Will I spend the hours researching all the issues and finding out who to contact so I can get my $30? No. I'll just throw it away and curse them. Maybe I'll write about it on my blog.

They know I won't go through that amount of trouble. I'd bet thirty dollars that they have a memo saying to deny all rebates the first time just to sift through the pile of entries the poor bastards who actually submitted the rebate had sent in. This is pure profit for Micro Center and pure profit for Belkin. Like Best Buy's 43 million dollars in unspent gift cards, these two companies earned an extra $30 for nothing at all.

Mail-in Rebates are just another way retail steals from customers. I thought I was getting a router for $20 and instead, Micro Center and Belkin take another $30 out of my wallet.

  1. Crappy ant-theft / anti-consumer packaging.

The next time I send in a mail-in rebate, I'm going to seal the whole letter in a quarter inch of hard plastic and stamp "anti-mail-theft protection" on it. Let the rebate jackasses cut open their fingers trying to open the stupid plastic packaging.

I can understand a retailer's desire to deter theft, although more and more, after gift cards and rebates, I begin to sympathize with the thieves. When their anti-theft measures include three plastic seals on every seam of a DVD case and a thick molded plastic shell around a USB Drive, now they're inconveniencing me. I've seen people SELLING devices that open these packages. There shouldn't be a market to open up pain-in-the-ass packages.

Have some thought about the convenience to the customer once in a while instead of only worrying about your bottom line. I can't wait for the first 22 stitches lawsuit to hit the manufacturer in some plastic bubblepack Christmas catastrophe.

Bonus Number 7: The format wars rage hot.

I wasn't going to preach against Digital Rights Management again but it makes me want to scream that the two largest format wars in history are going on simultaneously and no one seems to care.

Sony and Microsoft have drawn the lines between Blue-Ray DVD and HD-DVD. Sony even had the balls to force a Blue-Ray player into the Playstation 3, increasing the cost by nearly $300 per unit, just to get their player out there and into people's hands. I hope they burn in red-ink hell for that.

The Blue-Ray people and the HD-DVD people should never have left that board room until they agreed upon a single format. They never should have forced HDMI as the only HD interface to HD content, screwing everyone with an older HDTV - the very people who helped adopt HDTV into the home in the first place.

The average consumer is simply going to be too confused and too angry to care about buying a new player. Higher resolution alone isn't a good enough reason to bring these invasive, overcomplicated, conflicting technologies into our living room. Screw you guys and your goddamn HD DVD players. I'll watch in 480p or I'll go read a fracking book. My brain thinks in higher resolutions than your jackass players anyway.

And then there's digital downloadable media, a war ten times bigger than the HD-DVD / Blue Ray war.

I have an Xbox 360, a Windows XP machine, and an iPod Nano. The only format that plays on all three systems is mp3, the very format that no commercial media producer supports. The only way for me to get my music legally is to buy the fracking CD, burn it to mp3, and transfer it that way. If I used iTunes for music (something I do very infrequently), I'm screwed if I want to listen to it in my Xbox 360.

Video is even worse. I paid for a subscription to all of season 3 of Battlestar Galactica. I can watch it through iTunes on my computer but, even though the technology is there, I can't stream it to my Xbox 360 and watch it on my TV. The only way I can do it is to download it from the hackers on BitTorrent and stick it on my Mbox, a xvid player with composite out.

Now Xbox Live is selling movies. Can I watch those on my PC? What about on my iPod Video? Digital media is now completely tied to the direct device for which it was purchased.

If you had to play Sony DVDs on Sony DVD players and Toshiba DVDs on my Toshiba DVD player, DVDs would never have taken off. People would be screaming if their entire DVD collection went dark the minute they switched from a Panasonic DVD player to an Xbox 360 DVD player. Why aren't they screaming when their entire iTunes video library goes dark the minute they decide that a Zune is a nicer player?

Big business entertainment, electronic, media, and retailers have begun a new age of screwing customers. They get away with it by pure mass and impossibly undercut prices. Customer service doesn't exist anymore. Now we have engaged in business-service, a state where the customer exists to placate big business and do our part by suffering through their horeshit to buy crap we don't want or need.

We begin a new age of self sacrifice in money, time, and physical energy to worship the ziggurats of Best Buy, Wal-Mart, and Target.


Resist the pitch: Just say no' to extended warranties ... most of the time

Gift cards not always fully spent

Five Reasons Blue Ray Will Never Be In My Home

Best Buy Receipt Check

Customer Confidential