By Fred Taub, President, Boycott Watch
When shopping, consumers rightfully have the
expectation that they will be treated fairly and that advertised offerings are
in fact as advertised. It's not only fair, it's the law. If the price on a
shelf is not what you see at the register, the company has the legal obligation
to give the consumer the posted shelf price. This was not the case at
Microcenter, a privately held computer products retailer with stores
nationwide.
On January 14, 2012, I saw an online ad
on the company website offering a customer-returned Lenovo Z585 laptop for
$440.96 which had every feature I needed, so I was in the store the next
morning to purchase it. While there were several brand new unopened computers
of this model in stock, the computer I wanted to purchases was an 'open box'
returned item, and therefore discounted from the $629.99 price of an unopened
computer. Veronica, the sales associate, told me the computer was 100%
functional and was a "holiday" (Christmas) return, which is common. People
return items they don't want and the Christmas shopping season is replete with
perfectly good returned items. I was specifically and repeatedly promised the
computer was in perfect working order, reformatted as if to be factory fresh
and the only thing different from a new computer was I would get the remainder
of the warranty, in this case eleven months of warranty rather than the full
year. That was a great deal and I took it.
After
purchasing the computer and setting it up for my needs. I went to a meeting
where I discovered the wireless Internet, or Wi-Fi, feature was not working.
After a considerable technical support effort, it was clear the Wi-Fi on the
laptop was completely broken, making the computer useless. This is where the
story gets interesting. After what ended up being an entire wasted day with the
broken computer, I went back to the store later the same day to return it.
When a computer is
returned to a store, there has to be a stated reason. It is an expensive item
and the store employees will surely ask why, even to just know if the item is
functional. When the first purchaser returned this computer, it stands to
reason the customer stated it was in fact broken and how, as opposed to just
saying they did not like it. Even if there was no stated reason for the return,
Microcenter represented a computer they told me was completely checked,
including using the wireless Internet feature, and stated it was working 100%.
At checkout , a Microcenter employee reiterated the computer carried an eleven
month warranty as opposed to the full year as the only difference between the
new model and this returned computer. Microcenter advertised a product and as a
consumer, I expected the product to be as advertised, both in price and
functionality.
In the process of me returning the
computer to the store, Microcenter confirmed the computer was not working and
the store manager claimed it was a mistake by Microcenter technicians. The
mistakes of their technical staff, however, should never be the problem of the
customer. Regardless, one of two things happened. 1) Microcenter knew the
product a defective returned item and tried to resell it while knowing it was
broken, or 2) since the store manager stated their technicians thoroughly
checked the computer including using Wi-Fi, Microcenter must have known the
computer was defective before advertising it for sale. Therefore, Microcenter
knowingly falsely advertised a broken computer as working, knowing the customer
would have to return the computer, affording them the ability to sell a higher
priced or different computer to the customer.
That
establishes this case as a bait and switch. Microcenter must have known they
were placing a defective product on the shelf, advertising it on the Internet
as an In-store-only offering, thus bringing the customer into the store.
Microcenter lured me into their store to knowingly sell me a defective product
at a discounted price, only to ensure I later return to buy a higher priced
computer. Sure enough, I was offered a new and working Lenovo Z585 at the full
retail price. It was only after I complained profusely that they offered me a
discount on a new version of the computer, but not the advertised price I had
paid. That was not acceptable as it was part of their bait and switch, in this
case luring me in to their store to purchase a computer at a discount price
while then trying to get me to pay more than the advertised price for a working
computer of the same model.
Mayfield Heights, Ohio
Microcenter store manager Jim Brady also offered to repair the computer, but
that would have made the computer a refurbished model at the price of a
returned model. Meanwhile, I checked the Lenovo website where I saw they sold
manufacturer-refurbished Z585 computers for $312, obviously far less than the
$440 Microcenter wanted to charge me. For some perspective, the difference
between a holiday returned computer and a refurbished computer is the same as a
test-driver car at a dealership and one that has extensive repairs after an
accident. I was not willing to accept being ripped off by Microcenter which
wanted me to pay more for the computer I purchased than it was worth by turning
it into a refurbished computer. Microcenter advertised a returned item, as
opposed to a non-manufacturer refurbished item.
Microcenter manager Jim Brady also offered me a far lesser computer for less
money, but that too was bait and switch because what they offered was also far
less of a computer for more than the value. At no time was I never offered an
equal or better computer to replace what was advertised.
Other
important facts:
1) I made several attempts to call the store
before going back to the store to return the computer. As usual, it is
virtually impossible to speak to anyone on the phone at Microcenter. They post
their phone number on their website, but you hold times are thirty minutes or
more and the sales associates don't even bother putting their phone number on
their business cards. In my case, I was disconnected four times after being on
hold for extended periods of time. This is not unusual as I have always found
it nearly impossible to speak to anyone on the phone at Microcenter stores, and
when I have ever actually reached a real live human being, the answer always
turns to 'come into the store.
2) I had once purchased a hard drive
from their used drive collection after seeing it advertised on the Internet,
only to find the hard drive was also completely broken. The hard drive made an
immediate clunking sound, typical of complete hard drive failure, thus also an
item that should have been identified as broken beyond repair and not placed on
the shelf for sale. Yet it was advertised online, thus making me come back to
the store after receiving what was clearly pure junk.
3) I have
purchased what I thought was a brand new peripheral board, only to discover I
had to fix a virus issue on the computer soon after installing the board. After
clearing the virus, I found someone else's tech support notes inside the manual
which came with the device, clearly indicating that I was sold a returned item
repackaged, shrink-wrapped and placed on the shelf as brand new along with
factory-sealed items. Microcenter knowingly sold a returned item as brand new
at full-retail pricing and did nothing other than offer to sell me a different
product to replace it in an attempt to get me to purchase a better / more
expensive product.
4) Being that Microcenter makes it difficult to call
them to verify a product they advertise is available, I have on many occasions
had to drive twenty minutes or more each way to their store just to find out
the item I wanted was out of stock, and I ended up buying a more expensive item
from in-store stock since I was there anyhow. Had I known the product they
offered was not in stock before driving to the Microcenter store, I would have
purchased a similar product for less money at closer stores such as Wal-Mart or
OfficeMax.
The fact is, Microcenter has a history of
selling items they must know are defective in an attempt to get customers to
spend more than they originally intended to spend. Mr. Brady informed me they
only have one person on the phones at any time. This tells me Microcenter makes
it difficult for consumers to call the store, forcing potential customers to
come into their store just to find out of something is available or not. That
is nothing new - contacting anyone at the Mayfield Heights, Ohio Microcenter
store via the phone has been virtually impossible since the day it opened, and
I Internet searches reveal the same problem exists at their other locations as
well. This, therefore, is far more than a matter of bad customer service.
Microcenter works hard to make it difficult for their customers and potential
customers to get information before considering a purchase, or even to discuss
a problem after a purchase. Microcenter appears to have a policy to get people
into their stores any way they can, then getting people to buy items because
they are already there, even if the item they came for is not available as
Microcenter does not want customers to know when products are unavailable.
The same tactic is used to get customers into their
stores to purchase defective items, knowing the customer will have to come back
to the store so Microcenter can sell more expensive items to the same customer.
Just as Microcenter has resealed returned products and placed them back on the
shelf as new and unopened; and just as Microcenter has placed obviously
completely mechanically broken hard drives on the shelves as good used working
products; and just as Microcenter makes it impossible for a customer to verify
an advertised product is actually available in their stores, the evidence
points to Microcenter clearly knowing the Z585 laptop they offered for sale as
a 100% working returned computer was in fact defective. Microcenter will
clearly do anything to get a potential customer into their stores in order to
make any sale, regardless if a product the customer is traveling to their store
to purchase is available or not.
As a consumer, when
I see an ad for a 100% functional item at a specific price, I expect to
purchase a 100% functional item at that specific price. That was not the case
at Microcenter, thus why I am calling this both false advertisement and saying
Microcenter practices bait and switch.
After
addressing my bait and switch concerns, both store manager Jim Brady and
national call center associate James Anderson both refused to settle with my
demand to receive the advertised computer at the advertised price. They were
both informed of my intentions to file a complaint with the Ohio Attorney
General and US Federal Trade Commission for investigation into false
advertising and bait and switch tactics by Microcenter. Both said they had no
problem with that, nor did they object to me telling the story over the
Internet.
Buyer Beware and the law:
In
any sale, the purchaser assumes risk that the item purchased may be defective
or not suitable for the purchasers needs. Consumer protection laws, however, do
not protect sellers who engage in fraud, bad faith, false or misleading
representations about the quality or condition of any product. In this case,
the Lenovo laptop was represented by the seller as 100% functional with the
remainder of the manufacturer's warranty. Microcenter neither offered it as an
"as-is" product, nor were any issues that Microcenter must have known about
disclosed at any time. Caveat Emptor, therefore, does not apply here.
Bait and Switch laws:
The US Federal Trade
Commission posted 16 CFR PART 238 at
http://www.ftc.gov/bcp/guides/baitads-gd.htm and contains the
following:
Sec. 238.0 Bait advertising defined: Bait
advertising is an alluring but insincere offer to sell a product or service
which the advertiser in truth does not intend or want to sell. Its purpose is
to switch consumers from buying the advertised merchandise, in order to sell
something else, usually at a higher price or on a basis more advantageous to
the advertiser. The primary aim of a bait advertisement is to obtain leads as
to persons interested in buying merchandise of the type so
advertised. The Microcenter ad and my purchase clearly fits
this definition.
Sec. 238.1 Bait advertisement. No
advertisement containing an offer to sell a product should be published when
the offer is not a bona fide effort to sell the advertised product. [Guide
1] Knowingly selling a computer in which primary functionality
is broken, in this case the broken Wi-Fi, made this a non bona fide offer of a
working computer.
Sec. 238.2 Initial offer. (a) No statement
or illustration should be used in any advertisement which creates a false
impression of the grade, quality, make, value, currency of model, size, color,
usability, or origin of the product offered, or which may otherwise
misrepresent the product in such a manner that later, on disclosure of the true
facts, the purchaser may be switched from the advertised product to another.
(b) Even though the true facts are subsequently made known to the buyer, the
law is violated if the first contact or interview is secured by deception.
[Guide 2] The Microcenter ad and the quality promise I
received in the store clearly fits the description.
Sec. 238.3 Discouragement of purchase of
advertised merchandise. No act or practice should be engaged in by an
advertiser to discourage the purchase of the advertised merchandise as part of
a bait scheme to sell other merchandise. Among acts or practices which will be
considered in determining if an advertisement is a bona fide offer are: (e) The
showing or demonstrating of a product which is defective, unusable or
impractical for the purpose represented or implied in the advertisement
Since Microcenter sales associate Veronica turned the computer
on in front of me at the store to demonstrate the computer was working and then
turned it off, that action clearly violated section (e)
Sec. 238.4 Switch after sale. No practice
should be pursued by an advertiser, in the event of sale of the advertised
product, of "unselling" with the intent and purpose of selling other
merchandise in its stead. Among acts or practices which will be considered in
determining if the initial sale was in good faith, and not a stratagem to sell
other merchandise, are: (d) The delivery of the advertised product which is
defective, unusable or impractical for the purpose represented or implied in
the advertisement. [Guide 4] Microcenter clearly violated
section (d)
Note: Sales of advertised merchandise.
Sales of the advertised merchandise do not preclude the existence of a bait and
switch scheme. It has been determined that, on occasions, this is a mere
incidental byproduct of the fundamental plan and is intended to provide an aura
of legitimacy to the overall operation. Microcenter knowingly
selling a defective product clearly does not exempt itself from bait and switch
laws.
Footnotes 1. For the purpose of this part
"advertising" includes any form of public notice however disseminated or
utilized. Microcenter advertised the defective laptop for sale
on their website, which is how I became aware of it and the reason I went to
the store to purchase it.
The FTC guidelines are
clear, and Microcenter not only operated is in direct violation of 16 CFR PART
238, but as demonstrated in this complaint, has a history of violating consumer
protection laws. A copy of this is also being sent to Lenovo for investigation
into violations of the Lenovo reseller agreement. |
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