Source: Office Depot Associates Routinely Lie about Notebook Stock

From LAPTOPMAG.com
March 10th, 2009 by Avram Piltch

Times are tough—apparently so tough that some associates at Office Depot are willing to turn notebook customers away if they aren’t spending enough on extras. According to several LAPTOP readers, including a current Office Depot employee we interviewed, the retailer’s sales staff are under such intense pressure to sell such “attachments” as Product Protection Plans and Tech Depot Services, that many will tell customers who turn down these services that the computer they asked for is not in stock, even when it’s sitting right in the stock room.

We first became aware of this problem a few weeks ago, when we went to our local Office Depot, looking for a Gateway LT1004U netbook. We were surprised by how aggressively the sales associate tried to convince us not to buy the system and then, when we said we still wanted it, how aggressively he tried to convince us to buy its corresponding tech services. When we posted about our experience on the LAPTOP blog, some surprising comments starting coming in from several different readers claiming to work for Office Depot.

Readers Raise the Alarm

“Not only do [we] sales people depend on the extra cash we earn from add-ons, if we do not sell them and make a quota, we get the shaft from our bosses and their bosses and their bosses,” reader Chris H. wrote.

A reader going by the moniker Office Depot Employee was more direct. This commenter wrote, “At store level, OD puts too much pressure on sales consultants and managers to sell the PPPs (Product Protection Plans) & TDS (Tech Depot Services). I know of several stores in my market that will ‘feel out’ the customer to see if they are the type to purchase these services. If the customer lets on that they only want the computer and no services … then that store simply claims to be out of stock! We are required to sell 30% + on both of these services or we get PIP’d (Performance Improvement Process) (or Written up) and get ultimately fired.”

Another reader using the alias OD tech sales Manager wrote, “Unfortunately, what you all have been commenting is very close to the truth of the matter. But not all Office Depots practice this unethical decision making … I don’t hesitate from selling my laptops even though they deny wanting these services. Why? Because like you said before. (sic) the quota is 30% so I can lose out on 7 laptops but get 3 and be okay still.”

Current Salesperson Spills the Beans

While e-mails sent to these first three commenters went unreplied, we were able to make contact with a fourth reader named Rich (last name withheld), who was willing to talk to us and even provided us with a pay stub to prove that he currently works at an Office Depot. In an extensive phone and e-mail interview, Rich said that he was always honest with customers but had been instructed to lie about notebook stock both by one of his four store managers and by a district manager.

“I have witnessed lying about the availability of a notebook, and have been told to do so myself,” Rich told us. ” Once I was talking to the customer and, while I am actually speaking, my manager comes on the radio and tells me to say it is out of stock if they aren’t getting anything with it. I always ignore him and sell it anyway because lying to the customer is flat-out wrong.”

Sales Quotas for Associates, Percentages for Managers

Rich told us that although lying about notebook stock is not official Office Depot policy, the chain’s tough quotas lead many managers and sales associates to game the system any way they can. Rich said that store managers are held to a strict minimum “attachment rating,” which is determined through a complex formula that weighs the value of “attachments”—services such as warranties and service plans or accessories like printer cables—against the number of tech products sold.

If a store’s attachment rating falls below 30 percent, the manager could face disciplinary action from higher-ups. Sales associates like Rich, however, are not held to a percentage, but to a weekly dollar amount. Rich said his current dollar amount is $200, and if he doesn’t hit that number, he faces warnings, and then termination in short order.

“Basically they drill it in your head that if you don’t sell PPPs, you’re gonna get fired. It’s gotten so bad to the point where the managers are starting to find loopholes in the system. They would rather sell one laptop with a PPP than ten laptops with nothing. They don’t care,” he said.

Tough Weekly Goals Determine Commissions

In addition to the stick of losing their jobs, Office Depot sales associates have the carrot of commissions for themselves and all of their co-workers if the store reaches or exceeds its attachment sales numbers. According to Rich, each store has its own daily sales goal for PPPs ($200 for Rich’s store; as much as $450 for others he knows). The daily goals are determined by a number of factors, including that store’s previous performance.

At the end of each week, the commission rate for all of the store’s sales associates is determined based on where the total amount of PPP sales stands in relation to the store’s goals for that week. If the store achieved more than 120% or more of its goal, all associates get 15% commission for the previous week’s sales. If the store achieved 100 to 120%, they get 10% commission. Eighty to 99 percent nets a 5% commission for associates, while falling below 80% of the goal means that associates get no commission at all, no matter how much they sold as individuals.

“One PPP could make or break how the entire store gets paid for commission that week,” he said. “That’s why they put such an emphasis on it.”

According to Rich, the price of a PPP ranges from $100 on the low end to as much as $495 for a multiyear plan on an expensive notebook. Rich told us that Office Depot typically charges $125 for extended protection on a $300 netbook. Tech Depot Services vary widely in price. A local Office Depot associate tried to sell us software installation on an optical-driveless netbook for $30 per program, but Rich told us the most common services for notebooks are trialware removal, “optimization,” and a year of McAfee Anti-Virus. All three services combined cost $99, though trialware removal alone starts at $29.

The Tech Depot Services are an especially vibrant profit center for Office Depot, with little cost and effort involved. According to Rich, some services are performed by remote workers who do little more than push a few buttons to install software.

“The software installation the associates do. We will install everything,” Rich said. “The service where we install McAfee and get rid of all the trialware—the way it works is that we hook it up to our tech bench and a remote person will take over the computer and then they’ll basically run a little uninstall wizard that does everything for them. They’re basically just clicking a few buttons and it just does it.”

Why Associates Lie

Rich also told us that there is no commission at all just for selling a notebook without any attachments. So there’s no financial incentive for salespeople to help customers who don’t want protection plans or tech services.

Considering that the manager is held to a minimum attachment rating, but the associates are only held to a total dollar amount, we wondered why the associates would lie to customers and tell them a notebook was out of stock when it neither harms nor helps their individual stats. Rich explained that sales associates are both concerned about the store’s attachment rating and about losing the opportunity to sell each an individual laptop to a PPP or TDS-buying customer.

“Ideally, they want every single laptop to go out with a warranty, so if you sell one, that’s one opportunity that’s gone,” Rich said. “They figure if they don’t sell it, someone else will come in and get it, especially if it’s a laptop that’s in the ad that a lot of people are going to come in . . . They figure they’re going to sell it eventually. You might as well do it to someone that’s going to get something with it.”

Rich said that a typical Office Depot has at most one or two of each regular-priced notebook in stock at any given time, with a maximum of 5 units for sale circular items. He told us that employees aren’t too concerned about running out of stock, because a truck comes with new supplies at least three times a week, more frequently during peak sales times such as back-to-school.

The Scope of the Problem

Without doing a comprehensive survey of dozens or hundreds of Office Depot employees, it’s difficult to tell just how widespread the problem of lying sales associates has become. We know from our reader comments that the problem is not limited to Rich’s store alone, but we hear from Rich that not every associate lies and not every manager encourages their sales people to lie.

“As far as not-selling, I’ve heard about it from other stores. The original one [store] that I worked at, it wasn’t really too bad. They only time they told me not to sell something to someone was a customer who came in once a week and bought a computer and then returned it two days later. Other than that, that store was pretty good,” Rich recounted. “This one [the manager at his current store], his thing is to really get the warranty, to get as much as possible. He’s told me repeatedly to not sell a computer if you’re not getting anything with it.”

According to Rich, the district manager once visited his store and told all the associates to lie.

“We did get told by the district manager one time to talk to the customer, figure out what they want, do your normal sales routine, and figure out what they’re going to get,” he said. “Offer them the PPP. Offer them the TDS and then, if they’re going to get it, go check to see if we have it in stock and, if we do, bring it out to them. If they’re not going to get anything with it, just go check to see if we have it and then come back and say ‘oh, we’re out of stock on it.’”

We tried more than once to investigate this very claim by visiting a local Office Depot branch here in Manhattan, but were told that the laptop we wanted was in stock when we sent a LAPTOP staff writer undercover to purchase a notebook without any PPP or TDS plans. So either our local Office Depot is an honest branch or we got an honest sales associate.

Office Depot’s Response

We contacted Office Depot corporate and shared some of the things Rich had told us, along with our other reader’s comments. Their response in its entirety is as follows:

We certainly appreciate your bringing this situation to our attention. Our objective is to sell merchandise and to offer and recommend solutions to our customers, without regard to whether a customer purchases or does not purchase a service warranty or a software package. Office Depot has been recognized with numerous awards for our commitment to customer service, so please know that we take this issue very seriously and will take the necessary steps to ensure that we continue to enhance the customer experience and promote quality in our customer-related processes. With respect to your inquiry, we intend to look into the situation further, as part of our continuing commitment to ensuring customer satisfaction and consistent selling practices.

Update: Office Depot has issued a more detailed response.

How to Get What You Want

So what do you do if you want to buy a notebook at Office Depot, but you don’t want a protection plan or Tech Depot Services? You have a few options:

• Be honest with the sales associate in telling them you don’t want the services and hope that they are being honest with you about the stock. There’s a good chance they are.
• Lie to the sales associate, tell them you want an extended warranty, and then pretend to change your mind after he brings your notebook out of the back room.
• Use the store’s own inventory computer to check stock. Rich says that there are computers throughout the store that associates use that are also meant for customer use. If you grab the merchandise ticket for the notebook you want and enter its 6-digit SKU number into the item lookup box on the inventory computer, a screen will appear that shows whether the notebook is in stock. If the number of items in stock is either 1 or 0, it’s out of stock because item #1 is the floor model. Of course, it’s always possible a sales associate could still lie to you and tell you the remaining notebooks are on hold for another customer or that the computer is wrong.