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Gibson writes: "Why is Best Buy selling 'protection plans' for customers' electronics that cost 15 percent to 20 percent of the product's price, but don't actually offer any protection?"

Best Buy store. (photo: Vincent J. Brown/Flickr)
Best Buy store. (photo: Vincent J. Brown/Flickr)

Carl Gibson | Dear Best Buy CEO Hubert Joly

By Carl Gibson, Reader Supported News

16 September 13


f you bought a home with an insurance plan that cost roughly 15 percent of your home, you would think it would cover your home from accidents and disasters, right? If you bought a car with an insurance plan that cost roughly 15 percent of your monthly payments, you would hope that insurance would cover damages to your car, whether it was a fender-bender or mangled beyond all recognition. So why is Best Buy selling "protection plans" for customers' electronics that cost 15 percent to 20 percent of the product's price, but don't actually offer any protection?

Three weeks ago, I bought a Samsung Galaxy S3 from Best Buy store #2914 at the East Towne Mall, in Madison, Wisconsin. The phone itself was $400, and Chase, the store manager who sold me the phone, offered me the protection plan. He said that for $60, if anything happened to my phone within a year, the protection plan would replace it. I agreed, and bought the protection plan. You can see a copy of my receipt here, with the phone and protection plan listed.

Around 1 in the morning on this past September 11, I lost everything I own in a fire in just under three minutes (you can see a video of the fire here). I was working on another story, had my headphones on and audio turned all the way up, when I noticed my neighbor Nathan standing in my doorway. I took off my headphones and raised my eyebrows inquisitively. Nathan shouted, "The house is on fire," pulled the fire alarm, and ran away. I looked out my window to see 12-foot flames engulfing the third-floor deck right next to my room. I slammed my laptop, grabbed it and my wallet, my keys and my cat while scrambling down the stairs and out of the house. By the time the fire department got there, I saw that the entirety of my room, including my new Samsung Galaxy S3, was already destroyed by the blaze. I was lucky to have escaped alive and uninjured, especially grabbing as much as I did before getting out. I wasn't too worried about my $400 phone burning to a crisp - after all, I paid $60 for a year-long protection plan, right?

The next morning, I brought my receipt from the sale of my phone back to the same store, and talked to Chase, the same store manager who sold me my phone. I announced that since I lost everything in a fire the night before, and had the receipt proving my purchase of the Samsung Galaxy S3 and the protection plan, I would like a new phone to replace the old one that was burned. Chase informed me that he needed "any pieces of the phone" to have something to send back to the manufacturer before my protection policy could get me a new one. I figured that was also fair, since there may need to be confirmation that a phone was destroyed before I could just get another one. It wasn't easy to get back into my building, but I managed to talk the city inspector down enough to let me come up there just to retrieve my phone.

My phone is usually charging on the office chair next to my bed at night. It had rained the morning after the fire, so everything in my room was sandwiched under layers of ash and mud (click here to see a picture of my bedroom the day after the fire). I had to retrieve a hatchet from our tool room in the basement to cut the phone wires melted into my chair cushion from the wall, and to remove the cushion from the chair. Here's a picture of me holding the melted chair cushion and the pool of white plastic that used to be my Samsung Galaxy S3. I brought the chair cushion with wires and phone melted to it into Best Buy Store #2914 to prove my phone was destroyed, so I could get a new one.

When I came back to the store, the manager informed me that the manufacturer needs a serial number from the phone so they can know precisely which phone it was. I informed him that clearly, the serial number was melted off, and that since I brought in remnants of the phone, and a receipt showing I had indeed bought the phone with the protection policy, them giving me a new phone would be the next logical step. But Chase held firm to Best Buy's corporate policy, handing me a ten-page document of legalese that is the "protection plan." On page 6 of this document, a very long list of exemptions is painstakingly detailed, and includes things like "war, terrorism, rats, acts of God, tornadoes, fire," and others. I asked them if they read all of these exemptions to customers buying the plan. Chase said they didn't, as that would be too time-consuming. I added that customers probably wouldn't give Best Buy their $60, if they knew Best Buy's protection plan was a total scam. To add insult to injury, Chase told me they could put my $60 protection plan into another purchase, and "see what we can do on pricing" for me to have a new phone. I eventually had to fork over another $30 to your company just so I could walk out of there with any kind of phone at all (view the receipt for this extortion/purchase here).

Mr. Joly, I don't know if you've ever experienced losing all of your sentimental belongings within three minutes while narrowly escaping with your life. But I do know that you recently went through an expensive divorce and dumped $16 million of your company's stock into paying for your ex-wife's settlement. Seeing as you still have millions of dollars invested in Best Buy, which has $16.7 billion in assets, I think you or your company could, at the very least, afford to give a paying customer a full refund on their $400 phone, or a new phone altogether. Especially after that customer bought that phone with a protection policy and the understanding that the phone would be covered if, say, a customer lost it and the rest of his belongings in a fire.

But until either of those things happen, I've reported your company and your company's "protection plan" scam to the Better Business Bureau, and I'll also write this letter in hopes that people think twice before giving your company any of their money. Here's to hoping your company's stock dips a few more points after this gets published.

Peace and Blessings,

Carl R. Gibson

Carl Gibson, 26, is co-founder of US Uncut, a nationwide creative direct-action movement that mobilized tens of thousands of activists against corporate tax avoidance and budget cuts in the months leading up to the Occupy Wall Street movement. Carl and other US Uncut activists are featured in the documentary "We're Not Broke," which premiered at the 2012 Sundance Film Festival. He currently lives in Madison, Wisconsin. You can contact him at This e-mail address is being protected from spambots. You need JavaScript enabled to view it , and follow him on twitter at @uncutCG.

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+62 # krallison 2013-09-16 12:18
Never mind the useless BBB whoese main intent seems to be to protect businesses from customers. Report this to the Attorney General for your state which may actually be able to do something to help consumers.
-1 # Eldon J. Bloedorn 2013-09-18 07:50
When my local newspaper, Press Enterprize, was giving Obama a hard wrap, first time running for pres. I set up a picket at their main office. Handed out fliers. That did "tweak" their attention. The news paper became less radical.
+40 # Bookmark 7 2013-09-16 12:47
A few months ago I bought a Garmin GPS which didn't work...when we tried to return it we were told that ALL electronics must be returned within 15 days, no exceptions. When we pointed out that was not stated on the invoice, that was not considered an excuse. I will not purchase anything else from Best Buy.
+25 # noitall 2013-09-16 13:01
Best is usually my last choice. "Protection plans" are like gambling and like gambling, a tax on the math challenged.
+19 # Nominae 2013-09-16 16:35
Quoting noitall:
Best is usually my last choice. "Protection plans" are like gambling and like gambling, a tax on the math challenged.

Absolutely correct.

Whether electronics, appliances or automobiles, consumer reports advises against purchase of any "extended warranty" as being essentially a waste of money.

I recognize that this was not technically an extended warranty, but if Samsung offers no initial warranty, then that must be taken into account upon purchase.

As seen above, and as indicated by consumer reports, the "protection plan" doesn't do anything but make your wallet $60 lighter.

Your phone would be better protected by a home contents insurance policy than by any kind of "Store protection plan", and I would still carefully read the fine print on any home policy.

Live and learn - and these days we have to get up pretty early in the morning to stay ahead of what has now become the new U.S. Business Model across the Land - Theft, Deceit, Fraud and
+4 # zornorff 2013-09-16 18:27
Warranties are the most profitable thing these hucksters sell. Radio Schlock wants to sell you warranty protection on cables. A fellow who used to work for Crazy Eddie(another upstanding retailer)told me that salespeople were compensated very well for selling these worthless pieces of paper .
-1 # Doubter 2013-09-19 18:28
Every time I'm offered a "protection plan" I laugh in their faces.

"Protection Plan;" reminds me of Maffia movies.
+24 # Jackpine 2013-09-16 13:01
The WI Atty General is JB Van Hollen, who has never seen a corporation he didn't like. Not saying you shouldn't try it, but document your interactions with the WI DOJ & at the very least you'll have another story.
+21 # countrycarrie31 2013-09-16 13:02
Wow they are messing with the wrong guy, lol!
+25 # bingers 2013-09-16 13:22
When you get anything fixed by Best But the only thing you can count on is that if it actually works when you leave the store you WILL be back in a few months to have the exact same repair done again, if you're lucky enough to have it work for that long. My Toshiba laptop from BB lasted 26 months with 23 repair stickers on it. I keep it around as a reminder not to buy anything more serious than batteries or CDs there.
+18 # Reductio Ad Absurdum 2013-09-16 16:03
We have received good service and excellent assistance on the computers we bought from MicroCenter. I no longer even consider Best Buy as an option — it's totally off my radar.
+18 # hillwright 2013-09-16 13:34
A few years ago a TV I bought from Montgomery Ward failed - kaput, total failure. It had a 1-year warranty. then I checked the receipt and the TV failed just three hours after the 1-year warranty expired. Planned obsolescense is the new American way. A little different than losing it to fire, but the shame of modern retail marketing where the customer is always wrong.
+16 # futhark 2013-09-16 14:19
My Hewlett-Packard laptop computer self destructed due to a "loose screw" about a month after the 2 year warranty expired. Of course, that immediately put me in the market for a new laptop... The whole concept of product durability and the notion that a mechanism ought to be reparable are dead.
+24 # JSRaleigh 2013-09-16 13:47
Best Buy will rip you off and the CEO doesn't care. Nobody at Best Buy cares.
+1 # BobboMax 2013-09-21 22:01
Ref: "Nobody at Best Buy cares." the few times I've been there, the sales associates were quite attentive- it was clear the problems (and there are MANY) come from higher in the organization.
+40 # davidh7426 2013-09-16 13:48
Perhaps "Best Buy" should be renamed "Best Buy somewhere else, because we don't give a ****".
+20 # wrknight 2013-09-16 14:23
An even bigger question is why would anyone buy any insurance policy for an electronic device? People should realize that all these companies make a huge profit from insurance policies. Why? Because these devices don't fail very often and the money they lose in repair/replacem ent costs doesn't come near to the money they rake in.

Furthermore, I have yet to see an electronic device that doesn't come with at least a one year factory warranty at no additional cost. And in general if the device works well during the first 30 days of usage, it will last a lot longer than any insurance policy you can buy.

Bottom line: Don't buy any insurance policy from anyone for any electronic device - ever. Of all the hundreds of electronic devices I have owned and worked with, only a couple have failed in the period that any insurance policy would cover. And in fact, I have thrown or given away most of these devices because of obsolescence - not because of failure.

PS Bookmark 7: As for your Garmin GPS, Garmin will probably replace it for you. In my own experience, Magellan replaced a GPS for me with no questions asked. They even paid shipping costs. And it was only covered by their factory warranty.
+24 # Saberoff 2013-09-16 15:12
Jesus Christ, Carl, I think I speak for everyone when I say: Glad you're OK!

I too live in Madison. I hadn't heard of the fire but then I don't watch tele or listen to the radio much, as there's nothing on (lest, of course, it's the mighty listener sponsored, non-commercial WORT, 89.9 FM)

I think Mr. Joly's Best Buy store's ass is fairly grass around here now. Think I'll give it a ring-up myself.

Sorry to hear about your stuff,
Be well.
+9 # nancyw 2013-09-16 15:18
There's hardly any personal or ethical business anywhere. If there is, it's rare and be grateful and use them again!

I a few years ago refinanced my home mortgage. The same broker I had used before and now again, didn't remember (nor did I) that I had 1 month left before the 5 year cancellation of my then present mortgage. They charged me $7000 for canceling. You would think that the broker would take some responsibility for that and that the mortgage company would warn us so we could wait one month and save $7000. I guess that's only in old Frank Capra movies with Jimmy Stewart.
-3 # HenryS1 2013-09-16 15:30
I'm guessing this will be unpopular, and I don't like Best Buy and don't like their protection plans, but I'm not sure if I disagree with them.

If the unit died under normal use that would be one thing, but fire is a reasonable exclusion, especially when it's written into the terms. I personally wouldn't have expected fire to be covered if I had heard what the salesman said. "Anything" does merit a question or two, after all, if you had given the phone away you wouldn't expect a free one. I'm not sure I would expect replacement if it was lost. I know, these aren't perfect examples since they invoice some mistake or action on your part, while the fire didn't, but my point is that "anything" is reasonable open to definition.
+2 # AKYN 2013-09-17 17:46
Most protection plans replace under a number of conditions that include theft, etc. Loss by fire is not a reasonable exclusion since the owner has no control of the loss unless he sets the fire. So Best Buy should replace phone. Customer satisfaction is also a plus and a way to build business. Best Loses all the way around.
+8 # MainStreetMentor 2013-09-16 15:32
It's been my experience with "additional protection" purchases, that even if they ARE legit ... they almost always run concurrent with the manufacturer's warranty, NOT sequentially. Much of the profits realized by large, electronically oriented retail stores are from "protection" sales. Don't buy them - no matter what store sells them.
+11 # Art947 2013-09-16 15:40
In the latest issue of Customer Relationship Management, David Myron writes in his editorial about the problem that retailers have with "showrooming" the practice of looking at items in a retail store and then buying products from online retailers. The feature article singles out the problem that Best Buy has as its income has been in decline for the past 9 quarters! Carl, you piece is just further indication of why Best Buy has become a company that people avoid like the plague.

Good luck to you as you recover from this devastating loss of your personal belongings. I join with others in this forum of wishing you better things now and in the future.
+4 # FiberOptik 2013-09-16 16:03
Anyone who purchases any "protection plan" has meatloaf for brains. They are ipso facto a rip-off, and should be at all cost avoided. They are basically useless and why any consumer would purchase a product and then purchases a warranty that it is not a piece of garbage is simply not thinking. I am amazed they can get out of bed.

None too hopefully,

Phiber Optrik
+11 # gd_radical 2013-09-16 16:35
I'm very glad that you and your pet are ok. Unfortunately, many of the electronics corporations selling smartphones simply don't really give a damn about honoring either regular or "extended protection plan" warranties. I have in the recent past, attempted to "work" with both of the mentioned companies in your article and received absolutely nothing. Instead, both companies inferred that I was lying and any damage done to the phone was a) intentional or b) misuse. When I informed both companies representatives that I would no longer purchase a) products and b) locations. The only response from either company continues to be a stony silence. Hopefully, you will get some assistance with your article but I would not count on it given the current dismal regulation and consumer protections in place in most states.
+4 # LML 2013-09-16 21:48
To inject a mildly positive note into this depressing (and accurate) thread....
As far as customer service goes, NOTHING can beat my experiences with the Apple Store, even the Apple Store in a foreign country that repaired for free a laptop that I had bought in the USA - and so promptly that I was able to use it for my presentation the following day!!!
Sign me "One Happy Camper"....
+1 # maverita 2013-09-17 07:40
i lived in nyc for over a decade and learned there to read contracts before signing. when i started asking questions about their protection plan, they got quite defensive and rude. it took 20 minutes for them to provide me with a copy of the actual contract rather than just the form to sign. it took me two minutes to determine they were not intending to replace my phone for most of the reasons you would want insurance. when i pointed this out they were so rude i left in a huff and will never go back. remember to read contracts thoroughly before signing. and don't hesitate to cross thing out and reword the contract and have them initial the changes. if they refuse a reAsonable request, tell them where to put their contract. you can be put in jail for not honoring a contract so be conscious and cautious.
+3 # Buddha 2013-09-17 09:16
Wasn't that Consumer Protection Bureau the GOP fought so hard to neuter suppossed to stop this kind of "mice-type" legalese? Let's face it, insurance is mostly a scam, when you need it, you find the most common occurrances aren't covered.
+1 # Doubter 2013-09-19 18:42
Corporations are People (according to Supreme Court)

People love collecting money and

People hate paying money out.
+2 # 636Castle 2013-11-09 05:43
Right, because having your house burn down, and having your phone melted into couch springs is clearly the most common occurrence*.
+3 # 636Castle 2013-11-09 05:36
Here's a few problems with this story. First off, any time you're sold a Geek Squad plan, you agree to the terms and conditions of it. The terms and conditions state: "this Plan only covers products returned to us in their entirety". If you blindly agreed to something, that's your own fault. I noticed you left that part out. An associate cannot continue with his/her transaction unless you have agreed and either had the terms and conditions emailed to you, or if you've been given a paper copy. Here's the other thing. What do you think the purpose of the phone's MEID number is if it's self contained? How would a company be able to blindly provision a phone on to a network without the network knowing the MEID of that phone? You could have obtained it from your (likely prepaid) service provider easily. Annnnd lastly, this is only 1 out of (maybe) 20 protection plans that aren't sold, fulfilled, and rewarded with total success stories. The amount of people that go to a Best Buy concerned about their broken phone without any protection at all DRAMATICALLY outweighs the amount of customers that go to a store claiming they need a phone replaced because it was completely melted by a fire. Scamming people out of money is a lot different than misinterpreting what you're buying, then agreeing to it, and then being frustrated that your prepaid phone is what can't be replaced, of all things...

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