The shopping melees that broke out on Black Friday may have been nothing compared with the opportunistic greed that apparently took place a few days earlier in some Best Buy (NYSE:BBY) stores in Portland, Ore. As first reported by Portland news station KOIN and ultimately confirmed by TheInquirer.net, some stores seem to have disregarded the $299 and $399 advertised prices for the Xbox 360 core and premium systems and forced buyers to purchase more expensive bundled packages instead. A similar incident was reported by KSDK-TV at a Best Buy store in Illinois.
Now, bundles are nothing new with video game console launches. Some retailers such as GameStop (NYSE:GME) sold out of most of their initial promised shipments in early summer preorders; when the system's fall release rolled around, they turned to prepackaged bundles to cash in on the 360's popularity. Even Wal-Mart (NYSE:WMT) and Amazon.com (NASDAQ:AMZN) resorted to taking orders on bundled packages that included the console, select games, and some additional accessories.
Bundles are a fact of life. I realized that I had to pay the price for being a slacker by ponying up for an Xbox 360 bundle at Toysrus.com, complete with a few games that I'm likely to unload over the next few days. However, I knew that going in. The traditional "first come, first served" retailers that distributed new Xbox 360s last Tuesday all advertised the anticipated systems at the manufacturer's suggested retail price.
It's easy to see why stores would rather sell you a bundle. The margins -- for retailers and console makers alike -- are much kinder on software and accessories than on the hardware itself. However, unlike Microsoft (NASDAQ:MSFT), the chains weren't taking a hit on every console sold in hopes of eventually making it back on the software side. For retailers, it's simply the difference between making a little money and a lot of money.
Clearly, this wasn't a companywide Best Buy policy. At worst, it was the ill-advised avarice of local store managers. That's why Best Buy should publicize how it plans to distance itself from the unauthorized bundlers. Even if it does so, these stories will still come around to bite the company. Anyone remember when Toys "R" Us was played up as The Grinch for failing to deliver holiday gifts on time a few years ago? That fiasco led to the toy seller turning its virtual storefront over to Amazon.com.
Get to the bottom of this, Best Buy. If it happened, own up to it. Get as outraged as the customers who weathered the cold before getting stiffed. Arguing that customers can return any unwanted bundled items isn't enough. Apparently, some folks had brought enough to buy only the stand-alone system; when they discovered that they could only purchase the system in a more expensive bundle, they walked away empty-handed. You've lost those customers for life, Best Buy, but you stand to lose more if the story grows unchecked.
Then there's the flipside: If this didn't happen, tell us so. Shout it from the rooftops, because the silence is deafening. I'm simply quoting the various online sources and television stations reporting that these bait-and-switch misdeeds took place. If you're absolutely sure that they didn't, stand up and say so. Get the retractions rolling -- but only if you're totally convinced that your local store managers have clean hands.
Hoping this all goes away in time for the launches next year of the Sony (NYSE:SNE) PlayStation 3 and Nintendo Revolution isn't going to cut it. The Internet never forgets.
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Longtime Fool contributor Rick Munarriz is an equal opportunity gamer. He has gaming consoles from all the three companies in his home. He does not own shares in any of the companies mentioned in this story. The Fool has a disclosure policy. He is also part of the Rule Breakers newsletter research team, seeking out tomorrow's ultimate growth stocks a day early.
