Games retailers are among the most devious in the acquisition of your hard earned funds so I am going to let you in on a few little secrets they don't want you to know.
The Pre-owned Swindle
Whether you agree with a pre-owned games market or not, it is undeniably the most lucrative part of games retail. This is for a few very simple reasons. Firstly stock is acquired low and sold high. A triple A title such as
Skyrim will at most trade in for £25 in most retailers. While the full price is between £39.99 and £44.99 the pre-owned price will be between £37.99 and £42.99. A profit of around £12 - £15 pounds for the retailer and a saving of about £2 for the customer. You may think, well £2 is still £2 and it is, but retailers do not add VAT to pre-owned products, as the VAT was paid for that product the first time it was sold. The VAT for a £39.99 game is £6.66 so you are in fact paying the company more for a second hand game. You might be thinking "holy cow, I've been ripped off" and you probably have. The amount a retailer pays for a title is based on how many they have to sell as pre-owned but the amount they charge for a pre-owned game is based on the demand for the title and the price of the game new. They may be paying out as little as £2 for a title and selling it for £15. Also, do not forget that they offer more value for a trade in if you take their in store credit option. If you take the credit they really milk you because they never really buy the game from you in the first place. Add to this that many games devs now protect them selves with one use codes that deny pre-owned gamers key content and you really should fork out the extra for a new copy.
If It Ain't Broke, It Might Be Later
If you have bought a gaming console from a games retailer you will have undoubtedly been offered accidental damage cover. This in its self is not a con, and can save you hundreds of pounds should you need it but be warned, the sales assistants will try their very hardest to convince you that you NEED it very much. What staff in games retailers are trained to do is engage you in a conversation that will reveal personal details about you. They then use these details to tailor their pitch directly at you. Questions like "is this for you or is it a present?" opens a world of useful information such as whether or not the console will be used by children or not. They will target you with specific scenarios that are likely to happen in your situation to put the fear of god into you. Suddenly spending an extra £40 seems like nothing compared to the vision you have been given where by your console explodes in a jam, toddler, pet rabbit scenario.
Watch Out For The Up-sell
In many games retailers, the sales assistants are reviewed on their performance. This doesn't involve reviewing your knowledge of gaming, or how good you are at Halo. It revolves around percentages. For example, how much of the total money you took in a day was from selling accessories or insurance schemes. As a result, these guys' jobs are literally dependant on selling you crap that you don't need. Sure you might need an extra controller, or a headset. But the chances are, when you are buying a console you wont need to spend a further £50 - £100 pounds on extras. However, the staff will assure you that you will. Retailers make very little money from selling consoles because they have to give away free games. The average PS3 sale only makes around £20 in profit which if you think about how much they cost, is pittance. So how do they make money you ask; through adding highly expensive (and profitable) gaming accessories. These range from useful (the elusive second controller) to damn right pointless (strategy guides). Before you know it your £199.99 Xbox 360 with two new chart titles for free is a £300+ Xbox with a load of stuff you'll barely use.
Trading In
Another way these guys milk you is by buying your old games and consoles and selling them for huge profits. As I mentioned earlier, these guys make a fortune off the stuff. So how come you get so little for your mint condition Wii when they guy next to is selling a Wii that has been used as an ash tray? Well because the money you get is based on two things; how many of that specific product the company has in stock and how much they can sell it for. It might be convenient but 5 minutes on ebay will reap much more rewarding fruit. You will not get 50% of the money they will make from your gear so really, you are just lining their pockets not your own. Another con is in store credit, which is only ever marginally more. It should be loads more as you are guaranteeing return sales. But no. There is a reason why retailers like Game are struggling in this economic climate. Their methods are greedy and unjust. Their prices are high and their customer service is designed to screw the customer.