Should retailers fire customers they can't make money on?

So much for the customer always being right.

Some retailers are deciding that the customer can be very, very wrong -- as in unprofitable. And some, including Best Buy Co. Inc., are discriminating between profitable customers and shoppers they lose money on.

Like a customer who ties up a salesworker but never buys anything, or who buys only during big sales. Or one who files for a rebate, then returns the item.

"That would be directly equivalent to somebody going to an ATM and getting money out without putting any in," Brad Anderson, Best Buy's chief executive, said in a recent interview. "Those customers, they're smart, and they're costing us money."

http://www.sfgate.com/cgi-bin/article.cgi?f=/news/archive/2004/07/05/national1332EDT0564.DTL

Some see this as Best Buy trying to "have its cake and eat it too," by wanting to keep rebates, loss leaders, and massive promotions going, but exclude those who make routine use of them. Why not just stop with the marketing games? For Best Buy, it's not quite that cut and dried. While most of the promotions people "abuse" are rendered ineffective when well-educated customers have access to various bargain websites, the majority of Best Buy's customer base is still susceptible to them. Many people will go shopping for a printer (that Best Buy may be taking a loss on), and end up with extra print cartridges, printer paper and a service plan to go with it. Those customers aren't going anywhere for a while.

While the practice of labeling some customers as devils is by no means new, Best Buy's efforts represent the most concerted exorcism attempt we've seen from a major retailer to date. And it seems to be working. They've changed some of their policies to make them less vulnerable to exploitation, adding a 15% restocking fee and selling restocked goods over the Internet instead of in-store. More notably, they're attempting to explicity identify desirable customers and appeal to them directly.

Store clerks receive hours of training in identifying desirable customers according to their shopping preferences and behavior. High-income men, referred to internally as Barrys, tend to be enthusiasts of action movies and cameras. Suburban moms, called Jills, are busy but usually willing to talk about helping their families. Male technology enthusiasts, nicknamed Buzzes, are early adopters, interested in buying and showing off the latest gadgets.

Staffers use quick interviews to pigeonhole shoppers. A customer who says his family has a regular "movie night," for example, is pegged a prime candidate for home-theater equipment. Shoppers with large families are steered toward larger appliances and time-saving products.

Best Buy's strategies could represent the beginnings of a shift in how retailers approach their customers. As consumers become more savvy, and online shopping continues to grow, you can bet other retailers will watch Best Buy closely. Early results indicate that Best Buy's test stores are outperforming their established stores by a significant margin, and it's safe to assume that the trend will continue as they shift to their new sales mode across the board. Of course, if you aren't Barry, Jill, or Buzz, then who are you and how will you be treated? Customer profiling has a nasty side to it, one which we can attest to. It's common, for instance, to be utterly ignored in some commission-based sales environments if you look too young, or too poor.

http://arstechnica.com/news.ars/post/20041108-4382.html

I got to the store knowing what I want. I don't need them pressuring me to buy useless shit (like insurance or extened warranty, or other stuff I don't need).

I went to buy a laptop, and the guy at Best Buy asked me if I wanted a case for it, dust, mold, and water insurance, a surge suppressor, a printer, etc, etc, etc.

Annoying!

But the anything that they have complete control over like their off brand surge protectors (Dynex) made for them by a company or the extended service plan which they hope you won't use is almost prue profit. They are diberately attempting to add items to your basket cost usually a minimum of $60.00 per sale on top of that big ticket item.

Never bought much there anyway, just some computer paper and a couple of movies. They'll be glad to see me go.