Circuit City – “Advantage” Protection Plan?

Our son bought an MP3 player from Circuit City a year ago. With it, he bought a two year “extended warrantee” that the store offers called their “Advantage Protection Plan”.

A couple of months ago, the unit stopped working. He and Jonna went through all the rigamarole of pre-work they require before you have to send it in to have them take a look at it, and then they sent it in. Circuit City was unable to fix it so they sent him a gift card for the full price of the MP3 player.

Saturday we went to replace the unit. The boy decided to buy a 30G iPod, and before he bought it we inquired on the state of the extended warranty, specifically whether the two year warranty we bought applied to the replacement or whether we would get a refund for the remaining year.

The person at the counter quoted us this paragraph from their “Advantage Plan”, which appears on page 7 of their service guide:

Upon issuance of a Circuit City Gift Card, or if You are provided a rebuilt product as a replacement, the Contract for Your Electronics Product is deemed fully satisfied. The Contract shall not be transferable to any replacement product, unless otherwise required by state law.

So what does this mean to customers of Circuit City? If you buy electronics from them, buy a two year extended warranty and the merchandise ceases to work in a year and they cannot fix or replace it, you get the amount refunded by a Gift Card for the store and your warrantee is considered “satisfied”. So that remaining year you paid for – gone. You can’t use it on the new unit and have to purchase an additional “Advantage Plan” for a unit that might be faulty like the first one.

Worse, since they do not give cash back, you have to give them additional business. You cannot just get your money back and go somewhere else.


Circuit City really needs to learn a little about taking care of customers, rather than viewing them as something to take advantage of and “extract value from”. A company’s actions towards its customers shows a lot about its philosophy about business.

You can bet that from now on, all of our business will be with Best Buy.

Calacanis Interviews Evan Williams, Co Founder of Twitter

I really enjoyed Jason’s interview with Evan Williams (co-founder of Twitter, Odeo, and Blogger) especially Evan’s “lessons learned” about entrepreneurism:

1. Focus
2. Small things can become big.
3. Don’t go too wide.
4. Trust your gut.
5. Don’t do anything you aren’t absolutely passionate about.

DreamHost Sets The Bar For Corporate Blogging

I’ve seen this blog entry from DreamHost (my web hosting provider) referenced a few times on the network. I finally got a chance this morning to sit down and read it. I have to say, I’m impressed with both the honesty and the transparency that DreamHost provides to their customers.

I’ve been a DreamHost customer since 2001. I’ve had only a few issues during this time, all of which were resolved in timely manner by their friendly staff. The last three weeks for them sounds like they were pretty challenging, but to see a blog entry detailing every event is an extremely refreshing thing.

Wouldn’t it be great if every company were this honest with their customers? I know I get pretty frustrated when I know that the site is unavailable (you know, because of all the indispensable value it provides to you, the reader ;)), but actually hearing an honest account of what happened rather than vague excuses or blame just increases my loyalty as a customer.

Good job DreamHost! Keep up the great work. This is just one of many reasons I’ve been here so long.

The Flickr vs. Zoomr Thing …

I was really glad to read Stewart Butterfields response to the whole Zoomr API key thing that happened over the weekend.

The first thing I thought of when hearing about the hub-bub first on Tom the Architects blog and then on yesterdays Geek News Central (I’m a little behind lately) was the article Strategy III: Let Me Go Back by Joel Spolsky. I think that the essay does a really good job of illustrating the huge barrier to entry that the ability to choose to leave can be to a customer looking to use a product or service.

For me, the attitude of not allowing competitors to access public API keys seemed way too “lock in” like for even me, a very loyal Flickr user. I know that some of the arguments floating around places like TechCrunch were things like “why should Flickr let Zoomr use their bandwidth to take their customers”. The main reason for this is because they chose to create a public API and cannot discriminate against competitors without looking petty and protective.

This is a hard thing for companies to learn. Customers don’t want it to be a hard thing to leave your site or product. It’s a powerful feeling to know that you can move somewhere to try out a service and if it doesn’t work for you — you can leave. At different times in my career I’ve watched people confuse the idea of “creating stickiness” with the idea of tying the customer to a particular product — or at least making it hard for them to leave — and its really just disappointing to me and a clear sign that someone doesn’t get it.

“Stickiness” is the value you are creating that cannot be provided anywhere else and has nothing to do with whether your customer is “stuck” with you or not.

The decision that Flickr has made is to allow public access by competitors to their public API’s is a good one. I do disagree with Tom on one point, in that I think that the requirement that such competitors are required to provide a complete and accessible public API for them is a good one. I think thats a fair trade off and overall will set an example and a requirement to play fair and an expectation that when you take advantage of openness, you must be willing to be open yourself.

Oddly, its the same example Stallman has been trying to set for years …