Why retailers won't let us buy in peace

Going to some stores these days is like running a gantlet of offers for extended warranties, store credit cards, loyalty clubs and trial subscriptions to magazines.

By MSN Money Partner Jul 5, 2011 11:54AM

This post comes from Joe Montat partner site The Street.

 

You'd think $1.98 worth of shoelaces at a Payless shoe store would be too small a purchase to inspire a request for a phone number at the checkout.

 

Even though a customer in the adjacent line happily gave their digits, we, unable to quickly recall a fake phone number from The Rejection Hotline, merely explained that we'd rather not.

 

The moment felt far more awkward than it rationally should have. After all, no good can come from giving our home phone to a shoe store. "Hi, Joe, this is Payless . . . look, we're moving next weekend and we were wondering if you could swing by to help? We'll have pizza and beer!"

 

Is it really too much these days for us to just be able to shop in peace? Why is it so hard to just pay for a purchase and go our merry way without being harangued for personal information that would be more in line with a mortgage application?

 

Buying a speaker cable at RadioShack -- the longtime trendsetter in customer annoyance -- we had to repeatedly decline an extended warranty, credit card offer and request for home address. At a Borders bookstore, up until hours of that location being shuttered as part of the chain's bankruptcy measures, we were still asked to do ourselves a favor and pay $20 for a preferred customer discount card. 

 

Think of the gantlet one has to run at Best Buy. First a worker tries to upsell you. Then useless Geek Squad add-ons are dangled -- even if one has been computer literate since the fresh-faced teen in a blue vest was no more than a come-hither glint in his daddy's eye.

 

Then -- after beating back offers for "optimization" and refusing to believe there is nothing in stock that hasn't been left unmolested in its box, unsullied by Geek hands -- you get the extended warranty pitch. Translation: "We sell crap and it is gonna break." Post continues after video.

Off to the cash register, where there are yet more offers to extend the warranty. Then there is a request to sign up for a preferred customer card. There is also the opportunity to add 18% interest to our purchase by applying on the spot for a credit card. Finally, there comes the "good news" that we can "qualify" for a trial subscription to a variety of magazines.

 

By the time you make it back to the car, you'll need a bottle of Gatorade and a B-12 shot. When did being a paying customer become so taxing?

 

The answer is actually obvious. With consumer confidence still shaky, and post-recession spending habits still relatively frugal, stores need to do all they can to maximize their return on every sale and entice you back for more. All the data they collect helps them track your purchases and target future offers. The data could potentially be sold to earn a bit more, and the revenue from credit cards, warranties and magazine partnerships help hedge against revenue drops.

 

In a recent interview, Michael Norris, a senior analyst for publishing industry-focused Simba Information, explained that it is a smart move for bookstores such as Borders and Barnes & Noble to promote membership fee-based rewards cards. Those who pay tend to become more frequent, loyal customers, he said. To get their full money's worth, they shop and spend more.

 

The Best Buy annual report released in April offered insight into its often annoying practices.

 

"The 1.1% comparable store sales decline in the services revenue category was due primarily to a decline in home theater installation, partially offset by modest increases in our sales of extended warranties," it reads. Commissions from the sale of extended warranties represented 2% of revenue in fiscal years 2011, 2010 and 2009.

 

Too much information

Various states have laws on the books limiting what information stores can request from their shoppers. California, for example, enacted laws back in the 1970s prohibiting the demand of "personal identification information" upon making a credit card transaction. The intent, back in the days of carbon copy swipes, was to keep this information from falling into the hands of fraudsters if it was written on transaction slips. In 1991, the law was amended to ban even a nonbinding "request" for this information. In an age of database compilation, the law has been invoked in numerous class-action suits and taken on a role in privacy protection battles.

 

"It is the strictest in the world, to my knowledge," says Lothar Determann, a Palo Alto-based principal of the law firm Baker & McKenzie.

 

"There are a few other states, such as New York, that have similar statutes, but they are not as strict because they allow this with consent from the individual consumer, which I think is more reasonable," says Determann, who specializes in data privacy.

 

In February, the California Supreme Court agreed that the retail chain Williams-Sonoma broke state law by asking customers for their ZIP codes. In response to the ruling, more than 150 lawsuits have been filed against numerous retailers, including Wal-Mart and Target.

 

In Massachusetts, a class-action lawsuit has also been filed against the craft store chain Michaels Stores for collecting ZIP codes during credit card transactions and using the data for marketing purposes.

 

Some are clueless

Determann says many retailers "don't know what they are doing" when it comes to data collection.

 

"That's still the case, even though there is so much litigation over this now," he says. "I still get pretty reputable, large retailers who ask me about this."

 

He recalls how recently, during a presentation, he asked a client about their practices. "Oh, we don't collect this at all," was the answer.

 

"Then, after the meeting, I went to their flagship store, bought some stuff and they asked for my email address. I asked the cashier whether she did this just for me and she said it's common practice. I immediately emailed the legal department and said, 'Guys, you need to put a stop to this, otherwise you may get sued over it.' It is very prevalent, and it's very hard for the companies to get a handle on it."

 

More on The Street and MSN Money:

VIDEO ON MSN MONEY

23Comments
Jul 6, 2011 12:07AM
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I shopped recently at a Kohl's store -- a store I shop at A LOT and handed over my Kohl's credit card,  a couple of coupons and my ID (because I realized when taking my new card out that I had failed to sign it).  I was asked to supply my Social Security number by the cashier (whose first language was NOT english).  I asked why they needed that -  "we just can't complete your transaction without it".  I  immediately asked for a supervisor to explain that to me.  I wasn't about to supply someone with my SSN especially in a crowded store!  I was told that the young lady hadn't realized that I gave her my credit card and thought she had to look up the information.  Obviously a training (and comprehension) issue.  But it goes to illustrate this article well.  I am constantly asked for my zip code, phone number and/or email address  when making purchases and it annoys me.  I always refuse.  After reading this article I will make a point of contacting the HQ of any store that asks for this information and registering a complaint.  Thanks for the info.
Jul 6, 2011 12:30AM
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It is annoying and I don't want data collected on my shopping habits, nor do I want to be targeted for special offers.  The final straw came some months ago when on vacation I was asked to show ID when paying cash!

 

I don't argue with the salespeople or cashiers anymore.  I simply make up information.  I've given incorrect zip codes, phone numbers, addresses, and social security numbers.  So far no problems.

Jul 12, 2011 9:25PM
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I was at JCPenny's this last weekend, (I was talked into a JCP card a few months ago) this time I was asked to sign up for People magazine and I would recieve a free one immediatly. I refused and the cashier just stood there and looked at me with a plastic barbie smile, awkward. I never thought twice about this kind of thing happening, I guess I'm used to it. I don't like telling people no, but I think I'm going to start saying it a little more. Thanks for the article.
Jul 12, 2011 4:14PM
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i usually wear earbuds when i go shopping. really cuts down on these "offers"
Jul 6, 2011 10:58AM
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I worked for Sears over 20 years ago and even back then, the maintenance agreements was how they made their money. They pushed the sales people hard to sell their quota of MA's every month. And the keycard thing has gotten ridiculous, I'm at the point now of needing a separate key ring just for all the keycards to different stores.
Jul 13, 2011 11:09PM
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I hate it when people try to push warranties or upsell me when I visit a store.  I politely tell them "no" and not to ask me again.  If they I do, I drop the merchandise and walk.
Jul 6, 2011 7:42AM
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WOW! Left out is the BIGGEST offender in "retail scams", and that is the one SEARS runs!

 

Ever "try" to buy an appliance there? (which I do not do anymore of course), every three words out of the "clerks" (they ar not sales people by the way) mouth is?

 

"WOULD YOU LIKE TO BUY OUR EXTENDED WARRANTY"?

 

I mean SEARS only tries to sell their warranties! Ask a question about, say a motor, all the response is "well, buy our warranty"!

 

Ask about the manufacturers warranty, they again say, "well, buy our extended warranty and you will not have to worry about the motor" (or whatever)!

 

Stay far away from SEARS! And in most other stores, if your so inclined, their extended warranites are half the price of a Sears one! Last item I bought at Sears was a large TV. bought the extended warrany direct from the manufacturer, a longer warranty, full coverage, HALF THE COST!

Jul 6, 2011 9:58AM
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Is being asked for your zip code really worth suing over?  Good grief people, relax.  Oh that's right, we sue over everything now.  I forgot. 
Jul 13, 2011 10:36AM
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My latest experience at Best Buy was wonderful, once I got an associate that seemed to care about what I needed and why.  He suggested a less expensive GPS than the one the previous associate suggested as it had blue tooth that was not on the more expensive one. I found that getting an associate to help me was a problem.  As a little old lady and not a young chick, it is harder to get attention.  My biggest objection to going into Best Buy is the noise level is extraordinary (yes I really am a little old lady).  The "viper  alarm" video was blaring and I turned it off while I was in that area. I  turned it on when I left.  I did apply for the credit card to get a discount, but they may be disappointed to hear that I will not be using it due to the phenomenal interest rate.  I don't object to giving my zip code when asked, but will not give any other info.  I will also go back there for a new computer on tax free weekend, but I will come supplied with ear plugs!
Jul 12, 2011 2:42PM
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Beware the extended warranty!  If you go to the office supply stores, it's the one thing they offer the employees a commission on.  If their profit margin is so high they can afford to give their employees a slice of the pie when they do so with no other product, how can that product be a good deal to the consumer?
Jul 12, 2011 10:48PM
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Actually at Michael's, cashiers ask for zip codes regardless of the way the purchase is paid for. The register prompt for the zip code comes up before the cashier even pushes the payment key. If you chose not to give us one, then we just press enter and continue the transaction. I say we, because I'm a sales associate at Michael's, fyi.
Jul 18, 2011 7:25AM
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Is the irony of having to view the Bank Americard ad accompanying the video in THIS article apparent to anyone else?
Jul 12, 2011 12:14PM
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Why did the author have to pay $20 for the Borders discount card, but I got mine for free? In fact, everybody I know has gotten one for free. They have a big sign in the door that says to get their discount card, it's FREE.
Jul 13, 2011 8:31PM
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I went to the local Recycling Depot this weekend to recycle some household cleaner, OTC Vitamin C powder and a few others. Rather than toss them in the trash or dump them down the drain.......
I was asked for my name, address, zip phone (I said unlisted.) and email. Then I had to print my name and sign - also on another form verifying I was not dropping off controlled substances.

Sheeesh........
Jul 18, 2011 5:20PM
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Short of not going to the store, I was hoping the article would have provided some tried and true suggestions/solutions to handle the checkout counter harassment.

I get tired of saying "no thank you" to each question, yet of course it works. I just want to say thank you to my purchase, take my bags and go. That's too much to ask now.
Jul 18, 2011 8:49AM
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I think Best Buy is probably the worst leg-humper of all.  It always reminds me of Rex Kramer going through the airport in the movie Airplane.
Jul 12, 2011 10:40PM
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Retail consumer electronics brick and mortar shopping is headed the way of the dinosaur; I don't know why people come back to retailers that consistently badger customers.  In fact, all trends point to online shopping as the refuse to avoid all the hassle.  Is there really any major electronics item (maybe cell phones with promos) that "must" be purchased at Best Buy, Sears, HH Gregg, PC Richard, Fry's and the like? If you didn't know, Conn's in Texas got nailed big time in 2009 by the AG for deceptive extended warranty selling practices.  Check out all the complaint sites/blogs - Best Buy gets hammered for the nonsense it spews.    With expert and peer reviews, great pricing, no tax and hassle free, online is the only way to go for me.

 

Every single survey tells retailers that customers don't enjoy being hassled by pushy salespeople.  Why would anyone make a spot decision on an extended warranty/protection/service plan (all semantics) anyhow?  the "sales" person's word is HEARSAY and there is invariably a minimum of one half-truth or deception told about the plans.  Year 2 for a product life cycle has no relevance other then to actuaries.  Years 1-3 on  a TV is still EARLY in its full life cycle (probability of one failure is less than 5%).  Your appliances will still last, on the average, more than 10 years - so why do you care about guaranteeing the first 5?  Even if you had one service call in the first 5 years, it still wouldn't pay.

 

Imagine brick and mortar retail competing on customer experience alone, without all the nonsense.  There are still too many of us, 2 or 3 out of 10,   that give in and say "yes" to the needless services - this only reinforces what they, the retailers, are offering and getting away with.

Jul 13, 2011 5:50PM
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I went into a big girl's store because I was desperately looking for a beaded or chain belt to go with a dress that I had made.  I saw a necklace on a model in the window, and I went inside because that necklace would fit me for a belt..  At the checkout, the clerk started asking me if I had a store credit card.  I said "no".  She then began to ask me for my phone number, address, and other information so she could offer me a free store credit card.   I said "no thanks' and she continued.  I looked down--I am a size 6--and I looked back at her.  I said --"none of these clothes will fit me".  She said, 'do you still want the card, though?"    Needless-to-say....
Jul 18, 2011 12:27PM
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You think this is bad on our freedoms and privacy...check out the USDA program that will have horse owners (and those who own even one cow, pig, goat, hen, etc) filing reports on everywhere they go with their horse. Called NAIS for national animal identification system, it was created soley for the benefit of corporate agriculture so they can sell meat globally and show the world what a safe food supply we have.  But the rest of us,who are not part of big ag, have to pay for and work the program which inclusdes registering your premises with the govt, losing title to it, microchipping all critters, filing reports and losing those animals if disease is suspected...find out more at nonais dot org. 
Nov 14, 2011 5:27PM
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seems to depend on where you are..all i ever get asked for in the town where i live when i shop is address,and telephone number...and thats only happened twice,once at the dollar general and another time at a convenience store...

and indeed i did get more telemarketer calls,but after awhile i just got used to it..

i actually find the chime of the phone somewhat pleasent now,isnt that a little odd?

i have a 10 year old set of at&t brand wireless landline phones...things work great by the way

the only reason why i dont have a cellphone is because i rarely if ever travel

i guess that sort of thing happens though when your the only person in the whole town who walks a 2 mile round trip to the grocery
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