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Gamestop is in the news once more, and honestly it’s not all that surprising what it is about. If you’ve been following us for a while, you’ll remember our piece on Gamestop’s corporate greed. Since that was written more light has been cast on the pre-owned gaming giant (it´s worth pointing out that EB Games isn´t much better), and how they are now apparently pushing their employees to force pre-owned over new to just to keep their jobs. I’ve got a lot of insight on this subject as I’ve previously worked for Gamestop, and was a manager at one of their retail stores for several years. The facts that I’ll list here are accurate, and it´s indeed very true.

For anonymity, I’ve changed names, as well as roles in the storied examples I provide.

Recently, Kotaku stated that Gamestop was lying to its customers about their “New Circle of Life Program.” In this brand-new program, it gives each Gamestop store, as well as that store’s employees different percentage quota’s for:

– Pre-orders on merchandise and games
– Used Sales
– Pre-owned Trades
– Power Up Rewards Platinum subscriptions

Each of these are based on total transactions accumulated in store. This isn’t necessarily a new thing to be honest, as the company sees each transaction as an opportunity to receive one of these listed goals regardless of what is being tendered at the time of the transaction. Game advisors are expected to always introduce the “Circle of Life” at the register, and “remind” customers of the “benefits” of shopping at Gamestop and becoming a Power Up Rewards Member, or Gamestop Credit Card member.

This data is complied in a spreadsheet format and can be accessed by the staff and management team in the performance file on their POS to see their standing for the Day, Week, Month, or Year. Game advisors are expected to always push used over new, since obviously the used portion of the sale is 100% profit for Gamestop. It’s no secret that Gamestop doesn’t:

– Make money on new sales
– Believe in allowing customers to choose what they want when shopping

Once upon a time I had a District Manager named Trevor. He told myself and my staff not to let the customer linger too long on a decision and force them to choose as soon as their money or card was on the table. He never missed a chance to remind us how expendable we all were due to our “poor sales.”

He told us to grab the used game and ring it through without asking the customer if they wanted new or used, and that it would be better for the store in the long run. Once my original store manager left due to irreconcilable differences, our brand-new store manager Jordan endorsed this culture up until the moment a customer called him out on it.

The, then first-time shopper, asked for a new copy of Gears of War 3 at the time, and he rang up a copy of the used title. He closed out the transaction, and handed the customer the bag who peered in side and inquired about the unwrapped game with a giant yellow used sticker on its face.

He pitched the used game, about having the 7-day return, lower price, and the savings with the rewards card, but the customer wasn’t having it. He immediately returned the game and demanded a sealed Gears of War 3, because it was a gift. Embarrassed, Jordan complied and the customer told him what everyone thinks about those kinds of actions. They’re unethical, and under handed.

Why you may ask? Because you cannot assume what a consumer wants without asking first. The power lies forever with them. People won’t buy or shop with a company they don’t trust, and it shows with the culture Gamestop is attempting to breed. What is even more amazing about the culture at Gamestop is tthat it doesn’t incentify employees to push their sales further.

Employees work for hours—that’s it. If they introduced commissioned sales back into their company, they would see an increase in the sales, and probably trades. Any ways, let’s get back to what’s going on here.

So, according to this new program, if someone walks into GameStop and picks up brand new copy of Resident Evil 7 Biohazard without 1) pre-ordering another game, 2) subscribing for a brand-new rewards card, 3) buying a used game, or 4) trading in some games to help pay for it, then the transaction will knock down all four of these categories thus causing employees to lessen their percentage.

This happens regardless, as they would have to get a strike in each category to keep their heads above water. No matter how you cut the cake it’s a lose, lose situation for the employee.

Obviously, Gamestop doesn’t want to cut itself completely out of the new sales arena, or else it wouldn’t have a reason for new customers to shop there. Nevertheless, what it’s clearly doing is separating itself as much as possible from the new-brand games area as it can. For a company worth over $3 Billion dollars, they don’t seem to have a CEO who can introduce new productive ideas do they?

I say this because Paul Raines has barely an approval rating from his store employees of 34% recommended on Linkedin.

The sales people are so afraid of getting a negative impact on their numbers, they’re actually telling customers they don’t have new systems in stock, so they won’t take a $300-400 hit on their pre-owned margin. That’s pretty bad, especially because these numbers will get back to developers and console companies such as Nintendo, Sony, and Microsoft.

Each of the COL categories makes up roughly 25% of the entire program which employees are expected to uphold. The categories haven’t changed at all, even during my time as a manager.

– New sales
– Trades
– Used Sales
– Power Up Rewards
– Reservations

Going strictly from memory, here’s a little story that another District Manager named Dorien told us about the Circle of Life.

It starts with new sales, as these lead to customers trading in their old games towards the new copy of lets say Call of Duty. The customer is expected to trade in their old copy towards it. During these times Gamestop would introduce a bonus trade option. You could trade in your Call of Duty for $25-30, then receive a “bonus” of lets say roughly 10-20% to bring it up to $40 since they still need to make a profit.

So the customer believes they’re making money on the game, but in reality, they aren’t. Selling privately is a better option. From there the traded in copy is marked up almost 80%, and it re-sold at $54.99. You can save 10-20% with the Rewards card, and return in within seven days—but that doesn’t necessarily help. You could just go to Target, or Best Buy a few weeks later and get the title for $39-49.99 when it’s marked down.

Going further this leads to the Power up Rewards option that obviously goes into the next step. If you’ve been to Gamestop you know the speech, therefore, I won’t go into it.

Last we have reservations, which are supposed to be suggested no matter what someone is buying. The theory here is to work into the conversation what they’re playing, take notice of what they’re wearing or speaking about. Do they have a Halo shirt? Do they have a Batman phone case? Etc. If you successfully asked all the correct questions and got one of the circles achieved—you’ve won the right to keep your job another day in your District Manager’s eyes. Sort of.

According to Kotaku, when contacted about the new policy for employee’s the following statement was sent over:

“All of GameStop’s internal programs are designed to provide our customers the best value in all their video game purchases, including new and pre-owned merchandise. With any program, opportunities arise for improvement and we will continue to refine it to equip our knowledgeable store associates to provide a great store experience.”

This is a typical response from a corporate giant who gives zero damns about what customers want. Their interest is in the stock holder’s shares and pockets. If the company loses money due to non-profitability, it goes under and loses share holders. In my opinion, getting rid of Paul Raines as CEO of Gamestop would be a great first step for them to gain customer loyalty back. His outlook on what Gamestop needs and wants is pretty terrible.

This, paired with actually giving employees the incentive to push harder would help as well. For those hoping, this program will go away. I’ll be honest—it won’t, and it never has. Gamestop and several other companies with rewards programs have always had things like this in place. They just change course with their attempts. Eventually just like everywhere else—they’ll get you.

The best advice I can give you as a former employee of Gamestop and honest gamer and consumer? Shop around. Unless you play competitively or a lot, you can wait until it goes on sale or check online for other options for the game you want to play. Just don’t whatever you do, go to Gamestop. There are better places to spend your hard-earned money.

Source:
Gamesindustry.biz
Gamestop on Reddit

Credit:
Robin Ek – Editor