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Oops! Best Buy’s 50% Off Coupon and Consumer Protection

Posted in Consumer Protection

There are times when companies do really bad things.  There are other times when companies do really stupid things. The “bad things” are things like defrauding consumers, aiding and abetting Ponzi schemers, failing to honor warranties, or refusing to stand behind a product, to name a few.  “Stupid things” are things like what Best Buy did a couple weeks ago: releasing a “too-good-to-be-true” coupon on the internet.  By “too-good-to-be-true” I mean, spend $100 and save $50 when you pay with a MasterCard.  And the fine-print about excluding gift cards and certain electronics products, etc.?  Missing.

The problem with the internet is that once you release a coupon online people find out about it.  Then tell their friends, who tell their friends, so on and so forth.  Until, the next thing you know, Best Buy is in a state of absolute mayhem.  This Gizmodo article tells tales (also told in this Consumerist article) of one guy getting $1600 worth of Amazon gift cards for $800, an Apple TV for only $45, or $2500 worth of gift cards for only $1250.  That is a really really great deal.  So good, in fact, that there is no way Best Buy ever intended to make it.

I’m not surprised that consumers took advantage of this deal, who wouldn’t?  If I had that coupon in hand the morning they released it I would have driven over to Best Buy and bought myself that nice new electronic gizmo that I’ve had my eye on for a while.  I would have been very pleased with myself for getting a good deal and then I would have gone home and enjoyed my purchase.  Would I have tried to exploit the coupon by purchasing thousands of dollars in gift cards?  Nope.

Best Buy’s reaction was swift and decisive.  They changed the coupon, effective immediately, and made the promotion valid for only one day, for only one purchase, excluding gift cards, and limited it to one offer per coupon, per household. Best Buy then attempted to explain its stupid move:

Oops. Sounds like someone probably got in trouble for that move.

So what should Best Buy have done?  From a consumer advocate perspective the answer is clearly: honor the coupon.  Best Buy is not the first retailer to lose money after screwing up on a coupon or special offer (how about the 75% off a dozen cupcakes Groupon offer that forced a bakery in the UK to make 102,000 cupcakes at a loss?).  But from a more practical perspective, when you think about the magnitude of how much it would have cost Best Buy to honor this coupon, the answer is less clear.  The coupon was supposed to be valid for a week and was available online – I cannot imagine the amount Best Buy would have lost.  Hundreds of thousands?  Millions, even?  Best Buy was in a tough spot.  They definitely should have not immediately cut the coupon off (some customers were told while waiting in line that the coupon was no longer valid) – that is not fair to those that ventured out specifically to use the coupon.

This is a good example of the tenuous balance of power between corporations and their consumers.  On the one hand you’ve got the big corporation who should honor its promises to consumers, even when it comes in the form of a coupon.  On the other hand, you’ve got consumers just waiting on the edge to take advantage of any tiny slip-up and see how they could exploit it.  Neither one has the moral high ground here.

So what should Best Buy do next time?  Think twice before hitting “post.”  Maybe double check that fine print to make sure that you aren’t giving away the store.

Have you been harmed as a consumer? Call Berk Law at (202) 232 – 7550 to discuss your legal rights.