Saw a short note in one of the throwaway papers they hand out to commuters here in DC this morning (12/17). It stated Best Buy had reported its earnings were down something like 77% and that due to the poor economic times it was unable to capitalize on Circuit City's bankruptcy and was now offering a buyout package to its 4000 corporate employees.
If BB goes under, I wonder if the service guarantees they are selling will be worth anything.
If you are talking about the extended warranties, those are through an insurance company, not Best Buy. Other than that, manufacturers warranties are covered by the manufacturer.
So if they do go under, you aren't out anything, except being able to return defective products. There are two ways to handle that, one is back through the manufacturer and second by using a credit card. Some have warranties on items charged, others you can attempt a charge-back.
While returning product will be an issue, repair work will be an even bigger pain. Although I have never purchased an extended warranty for electronics, a lot of people do with the understanding they can bring it back to the store and have work done there. The store then handles the claim with the insurance company. If BB isn't doing the repair, does the end-user have enough information to file a claim after paying for the repair?
I do not think they are in any kind of trouble with a net 3rd quarter income of $52 million. They are probably just being carefull.
"Best Buy shares were ahead 15%, or $3.52, to $26.99 in recent trading.
Third-quarter net income dropped 77% to $52 million, or 13 cents a share, from $228 million, or 53 cents a share, a year earlier. Per-share earnings in the most recent quarter included 22 cents in write-downs for its investment in struggling U.K. chain Carphone Warehouse Group PLC (CPW.LN). Carphone Warehouse earlier this year sold Best Buy half of its distribution business for $2.1 billion and included a 3% stake in Carphone.
Revenue rose 16% to $11.5 billion as same-store sales, or sales at stores open at least 14 months and including Internet sales, fell 5.3%. U.S. market share rose 1.7 percentage points."
Link to article: http://money.cnn.com/news/newsfeeds/articles/djf500/20081216...
According to a friend employed at BB Corporate, they are targeting a 10% reduction in corporate employees.
Currently, when you call BB for repair they have a special 800 number to call for referral. They do very little repair in store, except for some computer stuff. The rest is contracted out. Your extended warranty pamphlet has the instructions for getting repairs done.
Extended warranties usually don't kick in till after the manufacturers warranty expires.
Not true with Best Buy. Theirs starts the day of the purchase.
Also, if the item is large enough for 'in-home service' under the standard warranty, the extended warranty is usually under 'in-home' service. Don't have to involve Best Buy ... their plans are fully underwritten.
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