Best Buy Numbers: The Lost Comments

Best Buy Store
My recent post about Best Buy Mystery Numbers seems to have traveled far and wide. Cool! As the British say, that post "slapped the crown right off the queen" — created a surprising amount of high-profile attention!

So, hooray for blogs! Thanks to those of you who linked it. It's nice to know that some people might also find interesting the extremely dumb things I find interesting. (It's comforting, really.)

Questions Answered

A user posting on Digg filled in some of my missing blanks. In regards "product service/replacement plans":
"A PSP number of 2.22 means 2.22% of dollars spent [are] on PSPable items, so if the store sold $20,000 of items that offer PSP's, they sold $444 worth of PSPs."
Additionally, regarding how shrink works:
"The shrink number of .26 means that they have [lost] .26% of total sales for that period, if the store sells $2,000,000 of product in the 6 month period, the .26 means they lost $5,200 in that period no matter what the reason (stealing, broken products etc.). Another reason they give to CS reps not to let people return product after [the manufacturer's return] period, if you talk a manager into letting you return something after 30 days, the [manufacturer] will not accept it and it's supposed to get thrown away at a distribution center, which hits your shrink."
Thanks, Shane-Z. I had no idea.

Comments Lost

The story also brought out employees of all shapes and sizes who commented on the post. Some (mostly) fascinating anecdotes about the world of retail were revealed, and it's worth at least skimming. Thanks to everyone for taking the time to comment!

However... that said, a minor "incident" with Blogger caused a whole batch of comments to pipe directly into the great binary toilet. I.e., they got deleted. Fortunately, I got e-mail copies. So, I'll re-attach all of the "lost comments" to this post!

If you'd like to hear those (lost) stories from the front line, click on! And thanks again for reading...


[Originally 6:20 PM] Best Buy has a budget for shrink in each store. This doesn't just include stolen items. This also includes lost items in shipping, paperwork errors that effect store profits, transaction errors, etc. Say they budget $20,000 every 6 months for shrink for a certain store. Every six months some of the team will stay overnight and count every last item in that store to get a store count. If the store ends up getting a better percentage, we'll say $10,000 of shrink, then we have what's called the 70/30 rule. This means that 70% of that $10,000 gets evenly distributed to all the employees in that store.
Anonymous Anonymous 2/06/2006 9:14 PM  
[Originally 7:49 PM] shrink percent = shrink($)/annual sales to date($)
Anonymous Anonymous 2/06/2006 9:14 PM  
[Originally 8:21 PM] In all honesty, this must be an old store location. I work on the Geek Squad in a newer location and those numbers aren't posted ANYWHERE in the open. They're only posted in our break room.
Anonymous Anonymous 2/06/2006 9:15 PM  
[Originally 9:29 PM] Yeah, I too work at Best Buy like some of the commentators here. My Best Buy too has no numbers posted on the walls for slack-jawed gawkers to pester us about. ;)

Seriously though, only the stores that do poorly would need a system like that.

.23 shrink? That's just awful. My store is .16 and we even see THAT as too high.

On an unrelated note to the person who posted the second comment: Best Buy doesn't pay commission nor any bonus of any kind for selling stuff. The only "bonus" we, the employees, receive is for low shrink. Thus we stop theft, we get more money.
Anonymous Anonymous 2/06/2006 9:15 PM  
[Originally 10:33 PM] Former BB employee here...

I concur with Anon. "Shrink" isn't just theft, it's anything that isn't sold or returned to the manufacturer. Stolen, fell behind a shelf, dropped and broken by a clumsy customer or employee, or mislabelled, it's all shrink.

When I worked at Best Buy (6 years ago, how time flies), service plan and accessory sales were announced in code over the store PA every hour. The manager would get on and say "TV department call extension X, computers call extension Y" and so on. The numbers were code for what percentage of that department's sales were service plans and what percentage was accessories. The purpose was to inform employees how close they were to their department's sales goals, and to foster competition between the departments.
Anonymous Anonymous 2/06/2006 9:16 PM  
[Originally 11:16 PM] "no one at any single BB is paid on commission."

uhm, i work at best buy, and yes they do.

i work in inventory/product process though, so i dont.
about shrink though, it goes like this. your store has a shrink budget, (ours is i thinkg 2million dollars) that might be way off... it might only be 200,000 dollars. that sounds more right. anyhow, that's the ammount they plan on us having stolen all year. If the team does well, and less is stolen, the extra on top there is split up and given out as a bonus. I dont know if most people realize though how often people try to steal.. we catch a ton too.. seems like about once per night shift someone is sent to jail.
Anonymous Anonymous 2/06/2006 9:16 PM  
[Originally 12:56 PM] i work for best buy currently, and let me tell you the secrets. shrink is a big issue, depending on the time of year. for about a month to two months, best buy shifts focus on different things. just recently before the new cycle, every boss i had was interested in accessories. they're always interested in accessories, especially since as someone stated before, they're HUGE profit. that goes to revenue.

revenue is always king, as it is said constantly around best buy. revenue is total profit pretty much, and if a department consistently hits, they're generally doing good. however there's something to worry about with rev, there's margin. margin is what you're losing on certain items in rev because of how cheap we sell it, as opposed to how much it costs us.

for instance, e-machine's are a big hit to margin, as they're being sold cheaper than they're bought. well how does a company stay in business doing that? cables, printer aisles, prp's, psp's, and finally the big one, GEEK SQUAD. geek squad services are roughly 87% pure profit if i remember correctly, and best buy is soon planning on pretty much being geek squad only, with a little bit of electronics on the side. if you ask me that's fucked up.

i was told at a store meeting months ago that best buy is shifting focus, from being an electronics store with tech solutions, to a tech solutions store that also happens to have elctronics. honestly, if it does happen i hope it will be the fall of the mighty blue and yellow. the past couple of months my bosses have been really interested in margin. a typical day "out on the floor" as a salesman consists of this. morning breakout - basically a morning meeting. talking about things that were done right and wrong the day before, or the month in general. then it's time to prepare the floor and get ready for dealing with customers all day. now throughout the day, you'll consistently be hounded by bosses coming up talking about "numbers". now they don't necessarily wear a tie, in fact, only one day a month the product processing manager wears a tie to work, they're always wearing a blue. i've honestly been told to "bend customers over" before in a morning breakout.

our store doesn't have those price tag numbers out on the floor for every tom, dick, and harry to see, instead we have it up in our break room. to give you an idea, best buy is insanely good at shrink. in comparison, none of the "lp guys" or loss prevention people at best buy actually are professional loss prevention people, however at most other stores they are. for example target. target if they're lucky, can expect a similar shrink goal of 1-2%! that's fucking ridiculous to be honest.
Anonymous Anonymous 2/06/2006 9:18 PM  
[Originally 2:23 AM] "The Shrink Payout means everytime the store does inventory each employee gets the amount included in their paycheck as a bonus."

This is correct, but there's more detail that can be included.

It's a cumlative bonus that builds every pay period and is determined by a regularly performed inventory (I believe it's bi-weekly) that compares sales for the period vs. generated gross revenue vs. inventory figures to determine the shrink. Then, based on the actual shrink percentage vs. the target shrink, 70% of the money that was 'saved' (in other words, 70% of the difference between where they thought shrink would be vs. where it actually was) is added to the shrink bonus. If for some reason, the actual shrink percentage is higher then the target shrink, this comes out of the bonus, so it can shift both up and down, placing emphasis on employees at best buy doing their best at preventing their end of controllable shrink.

At certain intervals (prior to 2005, every 12 months, since 2005, it's been extended to every 18 months), a physical inventory is conducted for the purpose of determining exactly how much shrink was actually lost, this determines the final shrink bonus, which is distributed amongst the employees.

There are two problems with the Shrink bonus. First, the figure that is posted on the board is an estimate. When the shrink is calculated at the end of the period, there is often a moderate difference between estimated shrink and actual, usually resulting in the bonus shifting at least $75 in one way or the other.

Second, the shrink bonus is pro-rated. Employees recieve the shrink bonus divided by their months of service within the period, so a person who has worked at best buy for 6 months only gets a third of the shrink bonus. Since employee turnover at Best Buy is 17% per year, this means that approximately 24.5% of best buy employees do not recieve the full shrink bonus. Since Best Buy pays out that full 70%, where do you think that extra money goes? The answer is the management team. So in a way, the Shrink bonus actually gives the management team incentive to terminate employees since they get a kickback from the leftover shrink bonus.
Anonymous Anonymous 2/06/2006 9:18 PM  
[Originally 8:20 AM] Best But is not on Commision, their Canadian ownder company Future Shop is commision based. Although companies can add "Spiffs" to certain products. For example, every high speed activation is a $25.00 bonus etc. Every employee has sales targets and PRP/PSP targets. But get no commision for what they actually sell. The one thing that every employee makes money off of though is the PRP/PSP. This gives the employee an 11% payout on their next paycheck for the $ amount of PRP/PSP sold. Ex. Employee sells a $100 PSP on a computer that employee just got an $11 bonus on his next paycheck. The shrink as mentioned earliar is paid out bi-annually in the inverntory count. BB has a shrink target. The dollar amount under that target 70% goes to employee's and 30% to the company. Ex. $100 under their shrink target and they have 7 employees each employee gets $10 bonus the company gets the other $30. Both the shrink and the PRP commision are to encourage employee's to take an active approach in selling PRP and stopping theft.
Anonymous Anonymous 2/06/2006 9:19 PM  
[Originally 10:14 AM] I worked for Staples for 4 years, and (sadly) was the dept. leader for PRP sales. Then they moved me to pens and pencils. But that's another story.

Posting those numbers, and not telling the employees, kind of makes sense. It's not as though it's a secret, an inquisition to a manager from the employee would most likely garner a truthful answer. I believe it's more for the RMs and DMs that come through to check up on the store during a regular inspection. When our DM came through, he had an entourage of 9 people, each with their own clip boards full of our store's numbers, so maybe posting them would be silly. I'm sure someone that knows what they are likes that they're there. But your average bubblegum chewing blondie at checkout isn't going to care at all.

It's an ironic tale, really: when I saw this gaggle of attentive suits, my immediate reaction was one of disgust. Then the DM came over, asked me who I was, and so forth, then proceeded to stand there and watch me work. Old bastard thought my method was amazing, said "give him a raise," had a lacky take a photo of my work, and then shook my hand and left.

3 weeks later, my layout was a new POG.
Anonymous Anonymous 2/06/2006 9:19 PM  
That concludes the "Missing Comments".

And with that, I think we all officially know way more about Best Buy than we ever wanted to know! :)

Thanks again for commenting everyone!
Blogger Cabel 2/06/2006 9:20 PM  
Slapped the crown right off the queen? Ow, i'm cringing - where did you get that from? I'm a londoner, and I've never heard that ever. ever
Anonymous Michael May 2/07/2006 1:40 PM  
let me just say that for the last 3 years at Best Buy I never got a spiff for the PRP/PSP on my paycheck.

Its not there. never has been. There is no way to track it for individual. And there is no line itemized section on a paycheck that states that.
Anonymous Anonymous 2/08/2006 9:46 AM  
For the guy posting that works in Merch ask your store PPM who gets commission in the store and he/she will slap you up side the head asking how long its been since you worked at best buy?

Mostly because Merch and Product Processing are seperate departments.

There is that blue buck thingy but that is only if the store does an amazing year. Honestly we heard about that months ago and they stopeed talking about it cause there is no way in hell the store will hit that goal.

One thing about people who think they can work at best buy and steal... They catch you. And when I say they I do not mean the inept LP guys. Some do but its your co-workers. If they call a hot-line and let people know about thier suspitions they get cash based on how much you stole.

And they will pin a lot of in-store theft on you. You can make in upwards of 10k on ratting out a stealing fool.

And I will tell you right now, as someone who got a nice payout for skrink last year, I will go through hoops if I suspect someone of stealing from my payout. There is not better satisfaction than seeing some looser get walked out in cuffs.
Anonymous Anonymous 2/08/2006 9:57 AM  
I work at Target as a Flow Key Carrier (Manages truck unload, salesfloor stocking and backstocking) and I just wanted to add that Targets losses are much higher because we sell a lot of easily breakable product. Heck every night there is at least 25 items alone that come off the truck broken and my store typically handles 1700 piece trucks daily ... which means we deal with a much larger quantity of product than most stores. (Walmart probably exceeds our product numbers but I guarantee they have a higher shrink number as well). All that to say because we deal with so much product daily (think of how many returns we get!) of course our "shrink" number will be higher.

There are a lot of other factors/differences between Target and Best Buy which also contribute to the higher "shrink" number. Also, as far as I know Target doesn't call it shrink or at least I've never heard the term used.
Blogger QuarterSwede 4/15/2006 5:26 PM  
Blogger Cabel 6/27/2006 12:28 AM  

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Name:Cabel Maxfield Sasser
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