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4 Lies That Best Buy Is Feeding You

Rick Aristotle Munarriz
January 12, 2012

I've never met Best Buy (NYSE: BBY  ) CEO Brian Dunn, but I get the feeling I would like him.

  • He's humble enough to accept that he and his consumer electronics chain aren't perfect.
  • He defends his employees, and that's important. Ask football fans why Raiders coach Hue Jackson got canned this week.
  • The guy publicly put out his email address this week, just in case anybody wants to send him a pitch.

Unfortunately, he's in a bad situation, and publicly going to the mattress to defend his company is only making Best Buy look worse.

It's a shame, because Dunn is likable. Unfortunately, he's just not really believable.

Speaking at the annual CES in Las Vegas yesterday afternoon, Dunn was interviewed by Consumer Electronics Association CEO Gary Shapiro. I wasn't there, but Forbes' Eric Savtiz was and he provided some of the head-scratching comments made by Dunn.

Since I can't cover them all, let's go over four of the more unbelievable claims.

1. "I wouldn't put returns and exchanges in the problem bucket."
Wow. Really? The original Larry Downes critique pointed out the company's strict and archaic return policy. Many others chimed in on Dunn's own corporate blog post over the weekend. How is it that (Nasdaq: AMZN  ) provides me with greater convenience (essentially printing out a free shipping label) and looser terms than a store in town?

The reason that Amazon is eating Best Buy's lunch -- and it is, while eyeing dinner and breakfast, too -- is that a seemingly cold and detached company can handle returns and exchanges more effectively than Best Buy. Even in the brick-and-mortar world, several department stores have kinder policies.

If Dunn isn't placing this in the problem bucket it's only because there are so many problems in the bucket that this one just doesn't fit.

2. This is the best time in history to go buy a television.
Are you kidding me? This is the worst time to buy a set. Apple (Nasdaq: AAPL  ) is ready to revolutionize this space later this year, and the competition will have to follow suit.

Sure, prices are going to be low as retailers get desperate about clearing out inventory. I'll admit it. I saw a Cyber Monday deal on for a 32-inch LCD for less than $200 and I pounced on it for my youngest son's room. However, anyone who would fork over good money for a TV now -- and much less a 3-D TV -- is as dumb as anyone buying an iPad 2 this month when the inevitable price cut is coming in a matter of weeks.

Sure, Dunn was being interviewed by the CEA. This is what he had to say. Come on, though. Protect your customers from a regrettable mistake.  

3. Once the state sales tax issue for online retailers results in a level playing field, "it gets interesting."
I agree that online retailers will eventually begin collecting state sales tax. However, does Best Buy really think that the 5% or 7% or 8% state sales tax will make Best Buy competitive with the online retailers?

There are certain cost advantages that online has over physical retail. There are also a lot of people out there who s