How Does Bed Bath and Beyond Stay in Business?
(I’ve stopped asking myself this question and am now a BBB convert. For more on what happened, check out this story)
M and I registered at a couple of places before we got married, and Bed Bath and Beyond was one of them. Even though most guys say it’s painful, I thought it was pretty fun to take the scanning gun and go hog wild picking out stuff that I wanted.
Not as fun as doing it in Best Buy, but hey—that’s life.
Turns out one of the reasons people register there is because their return policy is so liberal. You can take back anything you want, at anytime, for any reason, and get store credit.
Or cash. That’s right—cash. After an experience I had yesterday, which was great from the customer point of view, I’m left wondering how the heck this company manages to stay in business.
When we were picking out what we wanted to register for, I was in charge of researching a vacuum. So I did my due diligence—after all, that’s what an obsessive person does. I compared and contrasted all the models they had and settled on the best one: a $169 model.
Someone bought it for us and when it came in the mail I was kind of surprised—it was a behemoth. Huge and heavy. So much so that only I could take it out of the closet to use it. Hence, I am was in charge of vacuuming.
Not a problem, I’m progressive like that.
Then yesterday it starts making this awful grinding noise—after only 8 or 10 uses. So I give it a look under the hood and a piece of plastic is broken.
M and I are shocked: it’s practically new and my research said it was a good vacuum. My research and my vacuuming skills go under intense scrutiny.
So I call up Bed Bath and Beyond and ask what my options are, since we have no receipt and no box. I think we even threw the manual out.
Here’s basically what they said:
Just bring it to the store and we’ll give you store credit. Then you can pick out a new one.
Awesome! So we hop in the car and, just in case, bring along about 30 of those $20 coupons you see everywhere.
At the Store
So we get to the store and right away I find a smaller, lighter (this was on my priority list) model that has all the powerful amp and cleaning power our old vacuum has. And it costs about $60 because it’s on sale. I’m sold.
But we lounge around and start to buy other stuff, as often happens at Bed Bath and Beyond. There’s always something else you can buy there—picture frames, a replacement filter for the vacuum, a gardening can, and some other random stuff.
We go to check out and I sheepishly hand over my stack of expired 20% coupons, which the cashier rings up without even checking. Then she asks me how I would like the remaining $36 of my balance: on my credit card or in store credit. I stammer that my credit card would be great and I hand it over—amazed by the whole thing.
So I walked in with a broken vacuum, no receipt, and a stack of expired coupons and walked out with a new vacuum, a whole bunch of new stuff, and $36 on my credit card.
Again I ask: how does this business model work?
What happens with that broken down vacuum?
I understand that having a return policy that’s this liberal draws in a ton of customers. So that’s great, you get tons of convenience points there, BBB.
But isn’t it a little too liberal? Who are they competing with that they feel they have to offer such cushy terms?
The Motley Fool has an interesting article on the stock. It also agrees that the store no longer has traditional competition, but is now tussling with Wal-Mart and Target. And maybe it’s right—perhaps this kind of coupon craze and liberal return policy is just a way to get people into the store during tough times. And who knows, maybe people are more apt to redecorate since moving is impossible for so many right now (the same way car-part stores are doing brisk business because no one is buying new cars).
I’m no expert, but I just can’t understand why the store keeps these policies. Is being so customer friendly going to make me buy there more often? Not really—their competition is gone.
Am I going to take advantage of the policy to suit my needs? Hell yes. That’s what prompted Costco to change their policy, and I’m guessing Bed Bath and Beyond will do the same once the economy steadies itself.
Otherwise, I don’t think they can keep this up. Abusers will continue to walk in and switch out their stuff for newer items just because they can.
Next time I go I’m exchanging my burnt wok for a zebra snuggie.
Photo by NNECAPA