Advertisement Failure: Pushy Salesmen


A pushy salesman who refuses to take “no” for an answer can be immensely annoying. They sometimes try to go on and on with long monologues about how I need to buy something. Even when I have already refused to buy this thing. Several times.

I recently bought a new scanner. My old one was about ten years old, and I wanted to replace it with something that has higher resolution. I ordered the scanner from an online shop and selected the option to pick it up at the nearest store of said retail chain. Once my scanner was transported from the warehouse to the store, I got a phone call informing me that I can pick it up at any time. Normally such phone calls are quick and in no way annoying. But not this time.

“We would like to inform you that we are offering extended warranty for all electronics sold in our store.”
“I don’t need it.”
“How can you say that! Electronics often break. If that happens, a warranty would protect you from extra expenses.”
“The probability of that happening is too small to be worth paying extra. I won’t buy the warranty.”
“That is an incorrect assumption, scanners break on a regular basis, and repairs are very expensive…”

The conversation dragged on for about five minutes. I kept on arguing about how I don’t want the extended warranty, and the lady on the phone kept on inventing various lies about how likely a scanner is to malfunction and need repairs. Moreover, she kept on asking me to justify my decision and argued against every statement I made.

It was almost surreal to listen to a salesperson tell me that the product I am about to buy is extremely unreliable and will fall apart the moment I touch it. If electronics really were that unreliable, I wouldn’t be buying them.

Here’s the deal that was offered to me. The scanner itself comes with a two year manufacturer’s warranty. The shop offered me to pay extra 25% from the purchase price in order to extend the warranty for two more years, thus giving me a four year warranty in total.

That would have been a terrible deal. Extended warranties are usually a waste of money. If my new scanner breaks 23 months after making the purchase, the extended warranty will be useless. If my scanner breaks more than four years after the date of purchase, the warranty will be useless. If my scanner doesn’t break until I decide to replace it with a new one that has a better resolution, the warranty will be useless.

If my scanner actually breaks between two and four years after the purchase, the chances are that the repair will cost less than 25% of the purchase price. I live in a country where salaries are lower than in most other European countries, thus repairs are generally affordable. For example, not so long ago my refrigerator malfunctioned (after I had been using it for ten years), and the repair cost me about 15% of the purchase price.

In order for these warranties to be beneficial for me, 25% of all the electronics I own would have to break in the time period between two and four years after the purchase, and they would have to break so terribly that a replacement would be necessary. This is simply not happening. Of course, electronics break every now and then, but it doesn’t happen so often, and the repairs are generally pretty cheap.

I have some money in my savings account. If some of my electronic gadgets breaks, I will either pay for the repair or buy a new one. Stuff breaks rarely, and when that happens I can pay for surprise repairs. Never mind that usually electronics either break in the first few months after the purchase (due to some defect) or they serve me without any issues for at least five years. I am careful with my stuff, so it rarely breaks. Besides, this a scanner, I don’t even intend to use it that often, I certainly won’t be using it on a daily basis.

The very fact that some retail business is pushing extended warranties so hard on me guarantees that these warranties are profitable for the business while being a bad deal for me.

When I arrived at the shop in order to pick up my new scanner, the sales assistant said: “Would you be interested in purchasing an extended warranty? Our shop offers…” At this point I stopped him with: “No, and I am not interested in having yet another five minute argument about this topic.”

At this point the sales assistant did shut up, but he appeared very annoyed and acted as if I had offended him. He seemed really grumpy while taking my money and giving me my receipt for the purchase.

Some people tend to claim that shopping is fun, enjoyable, and even exciting. Yet for me it routinely feels like an ordeal. Even showing up at the store in order to pick up an item I had ordered online can be annoying.

I wonder why marketing specialists do this, why the sales assistants are trained to be so incredibly annoying. Such negative experiences should prompt at least some of the shoppers to go to a different shop the next time they need to buy something. I certainly don’t want to have yet another conversation with sales assistants from this retail chain. Then again, they probably have calculated that being annoying is financially beneficial for business. If pushing these warranties upon customers so strongly results in some people actually buying those things, then that offsets the lost customers who got annoyed and decided to shop somewhere else the next time.

Note: In my website, here you can find my other articles from this series of blog posts about marketing and its various failures.

Comments

  1. lorn says

    Used to be quality electronics manufacturers did a ‘burn-in’ for some time before the product left the factory. Generally, most failure happen in the fist few hours of a new product’s life. So you plug it in and test it after ten hours or so. I doubt they still do this and it is pretty common to get stuff DOA straight out of the box.

    I both live in Florida, and seldom use air conditioning. So I run my own stress test. With temperatures pushing 90F in my office space I run the unit hard for a few hours. If it holds up the odds are it will last.

    If they don’t take it back, pretty rare, I get the charges reversed by the credit card company. It happens every couple of years.

  2. says

    Back in the 80s, when they were first starting to offer extended warranties, I had a funny thing happen. My friend Fred M and I went to a “Circuit City” store so he could buy a VCR. There was one on the display shelf that was marked down nearly 50% because its LCD light was broken, it said “sold as is” and Fred (who is a wizard with electronics and a soldering iron) bought it so he could take it home and fix it. We went through the checkout and they offered him the extended warranty. Fred said, “really?” and took it. Then, he walked around to the customer returns and said, “I just bought this VCR and the LED backlight is broken, here is the extended warranty” And they said “oh, sorry” and went and got him a new VCR from the inventory, and we left.

  3. says

    It’s likely that the salespeople either get a bonus for selling extended warranties with a certain percentage of their sales, or they might even get a cut of every extended warranty sold. That would explain their pushiness.

  4. sonofrojblake says

    As a kid I had a job in one of those stores. EWs are EVERYTHING. They’re pure profit, so bonuses, performance reviews, commission everything is about how many of those you sell. Don’t blame the sales staff, blame the people who set their targets.

  5. says

    lorn @#1

    Generally, most failure happen in the fist few hours of a new product’s life.

    Yes, my personal observations are identical. For example, I once had an e-reader that stopped working two hours after I started using it.

    Marcus @#2

    Now that’s a funny story. Taking advantage of people who tried to push a bad deal upon you is cool.

    sonofrojblake @#4

    Don’t blame the sales staff, blame the people who set their targets.

    Of course, I understand this. I know that managers who make decisions are the ones responsible for these annoyances, low lever employees don’t really have a choice.

  6. cvoinescu says

    My take on extended warranties (and some types of insurance) is that they’re always priced to make a profit for the issuer, on average, so, on average, I lose. I am also more careful with my stuff than the average person, so the statistics they use to price a warranty are even more biased against me. So if I can repair the item myself, or can afford to replace it, or can afford to pay for whatever I’m insuring against, I will not buy the warranty or the insurance. If there’s a small but non-negligible risk that an event could bankrupt me, I will buy the insurance, e.g. buildings insurance (but not contents), and third-party driver’s liability insurance (but not comprehensive, unless it works out cheaper than third-party only, which it sometimes does). These two aren’t great examples, because I am compelled to buy the insurance (by my mortgage provider, and by law, respectively), but I would pay for it even if I had a choice. (Which probably makes me the exception, so I think it’s wise that it’s compulsory.)

  7. says

    cvoinescu @#6

    Yes, I mostly make decisions about insurance the same way.

    Paying 50 euro in order to insure a scanner that costs 200 euro for two years is a bad deal, but driver’s liability insurance or building insurance makes much more sense.

    I can also add an example about health insurance. Living in Latvia, I don’t buy it, because healthcare is at least partially paid for by the state, and the fees patients have to pay are, in general, affordable. If I lived in the USA, I would definitely get health insurance, because there real shit can happen to those who aren’t insured.

  8. says

    Intransitive @#7

    I read the stories from the link you provided. Oddly enough, I have never been personally annoyed by some service provider who doesn’t want to terminate my subscription for something. In my family, we have actually profited from this policy a lot.

    My boyfriend once called his phone company and said the following: “Your competitor offers me a better price, I think I should switch to them.” The answer: “Wait, we can offer you a discount.” The catch was that my boyfriend never wanted to switch to a different phone company; he just wanted a discount for his existing subscription.

    I have done the same thing with my Internet service provider. I would call them and say, “You competitor offers me Internet for X euro per month, can you offer me a better price or should I switch to them?” This strategy has always worked for me in my pursuits for the cheapest Internet bill I could get.

    Of course, if I actually wanted to terminate my account with some company and they refused to take “no” for an answer, then that certainly would be super annoying.

  9. says

    cvoinescu@#6:
    There’s an even easier algorithm: “If they didn’t expect to make money off you, they wouldn’t offer it.”
    So: the insurance you can’t have is the insurance you want.

  10. says

    Andreas Avester (#9) –

    Some are easier to walk away from than others. Companies which say “credit card only!” (e.g.world gym, friend finder) have long histories of continuing to bill crsdit cards even after you give notice in writing. Legality doesn’t stop them, and ex-customers usually face greater consequences (re: credit ratings, services charges, etc.).

  11. says

    @#11

    Companies which say “credit card only!” (e.g.world gym, friend finder) have long histories of continuing to bill credit cards even after you give notice in writing. Legality doesn’t stop them, and ex-customers usually face greater consequences (re: credit ratings, services charges, etc.).

    That’s something I have never experienced, because I have never allowed automatic monthly billing of my credit card. For all the regular services I use, I pay from my bank account with manually approved money transfers. For example, my phone company and my Internet service provider sends me an invoice each month. This is generally the norm in Latvia. Here we don’t have any companies that would insist upon credit cards only.

  12. cvoinescu says

    The problem of recurring billing is more or less solved in the UK.

    We have “Direct Debit”, where, at your request, a company can set up a recurring payment out of your current account. Most companies like this much more than other payment methods, and some offer small discounts if you do it, have it as a condition for their more attractive tariffs, or even not provide a service at all unless paid by direct debit. After all, there’s a smaller chance the bill will go unpaid if they can just take the money out of your current account. What makes this work is the “Direct Debit Guarantee”: after you’ve set up a direct debit, every time they take a payment, they have to tell you (e.g. send a bill) two weeks in advance, so you have time to stop it if you need to (which you can, because you can unilaterally cancel a direct debit). Unlike a recurring credit card payment, you can see a list of all direct debits on your account (e.g. using online banking) and you can cancel them at any time, and they stay cancelled. A company could set up a new one, but they need to prove they had your explicit approval to do so. If you tell your bank you have an issue with a debit out of your account, they’ll put the money back into your account immediately, and then investigate. Almost nobody dares abuse this, because banks take it very seriously: in the rare cases a company abuses this, they get cut off from the system.

    While it would seem even more dangerous to let a company take money out of your current account than off a credit card, in practice, because of the way it’s done, it’s a lot safer and easier for you to control. It’s a very well though out system.

    The only issue I have with it is not with the Direct Debit system as such, but with the fact that some people, for one reason or another, don’t have or can’t have a bank account, and then they can’t have access to some services, or need to pay more. But this pertains more to the general unfairness of society, and how people who are worse off often get left out, or have to pay more for the same things (electricity and gas, for example, are a lot more expensive if you’re on a prepayment meter than a regular one where you get monthly bills; but the latter involves a credit check).

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