Will Best Buy customers be okay with its rewards program changes?
The good news if you are a My Best Buy rewards program member is that you will no longer be required to make a minimum purchase to receive free standard shipping on online orders. The bad news is that you will no longer receive reward points for those purchases unless you pay with the retailer’s high interest credit card.
The consumer electronics chain began offering free shipping to members on January 9. The change in rewards points will go into effect on February 14.
Customers who hold the My Best Buy Credit Card will receive five percent back in rewards (2.5 points for every $1 spent). Card holders may also be eligible to receive one point for every $2 spent with companies identified as “Best Buy Partners.”
It’s interesting that Best Buy is extending free standard shipping on online purchases to all My Best Buy rewards program members since the program as currently configured is free to join. The move on the surface appears to be a response to Amazon.com’s Prime program and Walmart+. Those programs require annual subscription fees of $139 and $98 respectively. Walmart+ subscribers may add the retailer’s InHome delivery service to their memberships for a total cost of $138 a year.
Amazon Prime members receive free same-day, next-day and two-day shipping on select items. Walmart+ members get free same or next-day shipping on groceries from local stores and free standard shipping on other eligible items without a minimum purchase.
Best Buy in November reported a 10.4 decline in same-store sales for its third quarter year-over-year. Those numbers represent an eight percent increase over Best Buy’s third quarter performance prior to the pandemic, CEO Corie Barry said on the company’s last earnings call.
The retailer experienced sales declines across “most categories,” according to its CEO, with the biggest impact being felt in sales of computing and home theater products.
Ms. Barrie said that the chain’s $199.99 Totaltech subscription plan, which offers free two-day shipping along with around-the-clock tech support and added savings on product purchases and repairs, has resulted in net promoter scores that are “considerably higher” when compared to non-members. The retailer, she conceded, has not brought in the number of members it expected for the program.
- My Best Buy – Best Buy
- My Best Buy Terms – Best Buy
- Best Buy Reports Third Quarter Results – Best Buy Co., Inc
- Best Buy Co., Inc. (NYSE:BBY) Q3 2023 Earnings Call Transcript – Insider Monkey/Yahoo Finance
- Best Buy Totaltech – Best Buy
DISCUSSION QUESTIONS: How do you expect Best Buy customers to react to changes to its My Best Buy rewards program? What do you see as the major challenges and opportunities in front of Best Buy for 2023?