Consumers to Circuit City: Drop Dead

I admit it: After a frustrating customer service experience at a Circuity City store I wished the company would just drop dead. Now it looks like I wasn't the only consumer thinking that way.

After a disastrous holiday season, the struggling electronics retailer is on the ropes. Holiday sales dropped by more than 11 percent, cash flow is down more than 90%, and major shareholders have been abandoning ship. Shares of Circuit City (CC on the NYSE) have tanked, dropping to a 10-year low of $3.61 on January 4. Given all this, it's no surprise that CNBC's Mad Money wild man, Jim Cramer, recently stated that "Circuit City could be a goner."

Clearly, they shouldn't have messed with me.

Not so clearly marked

My troubles with the chain began on the Friday before Thanksgiving, when I noticed an "end cap," or end of aisle display, with a large sign advertising AT&T cordless phones for $19.99. A sticker on each box said this was a Circuit City "special buy."

I couldn't believe it. I had just bought that very same phone - a package including two cordless phones and an answering machine base - for $49.99. Over the weekend I decided to return that purchase to Wal Mart and pick up the unit at Circuit City.

The following Monday I returned to Circuit City, picked up an AT&T phone off the display, brought it to the counter ... and it rang up for $49.99.

"That's not right," I said. "This phone is on sale for $19.99."
The register person told me to go and bring her the sale sign. I did so, wondering why she couldn't just page someone. At the bottom of the sign, in tiny letters, was a model number. She checked the product box. They didn't match. "That's not the right phone," she said.

I protested. "But there's an end cap full of them with a sign advertising them as on sale," I said. Of course I had just taken the sign down, removing the proof. I asked for the manager.

He was unsympathetic. "Things move around here all the time. We can't be responsible for mismarked items," he said flatly.

"Yes you can," I said. I told him that I knew that the display had been up for at least four days.

"Are you telling me that you kept this sale sign up all weekend and no one noticed the problem?" He looked at me steadily but did not answer.

I told him I thought the store should honor the advertised price.

He declined.

"That's false advertising," I protested.

"No it's not," he said impassively.

The sign clearly included the name of the model number on sale, he said.

That information was printed in small type on the bottom of the sign, I replied. Furthermore, the actual sale model was not present on the display, and the display was fully stacked with the phone I had wanted. Once again he looked at me but didn't respond.

"Ok, I said, I made a special trip out here for this. Will you give me any consideration at all on the price of this phone?

"No."

I was disappointed that he wouldn't budge on the price, but I was appalled that he didn't even offer to apologize for my inconvenience.

I struggled to remain civil. Finally, I asked for his name, told him I would write a letter of complaint to Circuity City and left.

I felt like a fool. I had already returned the other phone for a refund, ignoring the classic advice: If it's too good to be true...

The fallout

Like most consumers, I never wrote that complaint letter. I was too busy. But I voted with my pocket book and did my best to avoid Circuit City for all of my purchases this season. Much of the electronics on my list I found at Target and Wal Mart - at competitive prices.

I did relate my negative experience at Circuit City to my circle of friends, and some came back with their own stories.

On the same day that I was rebuffed by Circuit City, I spoke with Michael, a friend and former Circuit City manager who quit in disgust last spring after the company's public announcement that it was laying off its most experienced store staff because, it said, they were making too much money. Seasoned staff were making between $14 and $15 per hour. In March management began replacing them with new hires it brought in for $9 per hour.

Michael wasn't one of the 3,400 people laid off by the chain, but he'd seen enough. He went across the street and became a manager for Target. I asked him what Target's store policy would be if merchandise were mismarked as on sale. "No question, we would honor that price," he said.

Michael says he is much happier at Target. He says the company treats its staff very well and adds that he makes "far more" than he ever did at Circuit City. Recently, he says, his old boss asked him to come back.

"I told him to go to hell," he says.

At that point, had I been a sharp investor, I would have spotted the trend, gone short on Circuit City's stock and been fabuously rich by now. Alas, I did not act in time.

Judgment day

After the holidays the extent of Circuity City's problems became clear. Apparently, the tiny Keene, NH store wasn't the only one in the chain alienating consumers. An AP story, Circuit City Staff Cuts Helped Drive Away Shoppers, says the company's staffing missteps are already becoming the stuff of legend. The company, the story says "is living the nightmare of cost-cutting gone bad."

As for me, I did finally get my phone - at Sears. I paid $39.99.

Just for fun I returned to the Circuit City store. This time the price tag said $54.99 - $5 more than the phone was priced at in mid-November and $15 more than I paid at Sears.

Interestingly, that same phone was still listed on the company's Web site for $49.99.

But I'm sure that the discrepancy was unintentional. They probably just mismarked it.