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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Mon Jul 14, 2008 9:28 pm Post subject: "Penny" Merchandise
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Beginning in 2008, really old Kmart clearance merchandise will periodically be lowered to a penny ($0.01). When discovered, the merchandise cannot be sold under ANY terms and is to be brought to the 605 clerk in the processing center to be scanned out of the store. I am curious if this is a practice borrowed from Sears and if anyone knows what happens to the merchandise once it is delivered to GENCO Logistics (in IL). (GENCO has long been the purchaser of defective merchandise, vendor returns via preprints/620's, recalled merchandise, etc. from Kmart stores in the Midwest.)
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rtv4me
Joined: 25 Mar 2008
Posts: 8
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Posted: Mon Jul 14, 2008 10:11 pm Post subject:
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In our store we have had some items go for a penny, and was sold to employees. The first time it happened the asm pulled it all into the hub and said no sale. Then about 30 min later it was all sold to a few people. We even had patio furniture sold for a penny.
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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Mon Jul 14, 2008 10:35 pm Post subject:
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| rtv4me wrote: |
| In our store we have had some items go for a penny, and was sold to employees. The first time it happened the asm pulled it all into the hub and said no sale. Then about 30 min later it was all sold to a few people. We even had patio furniture sold for a penny. |
That isn't the way it works at my store. Literally, all merchandise can be clearanced to a penny - whether the original sale price is $0.30 or $999.99. Once identified, it is promptly moved the the processing center to be shipped out. Purchasing a penny item can lead to immediate termination.
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terminator
Joined: 19 Oct 2003
Posts: 2562
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Posted: Tue Jul 15, 2008 12:20 am Post subject:
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If a customer goes to the cash wrap and it's a penny they have the right to purchase it. What do you do in that case?
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jbdet313
Joined: 03 Mar 2005
Posts: 1493
Location: Michigan
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Posted: Tue Jul 15, 2008 2:08 am Post subject:
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| terminator wrote: |
| If a customer goes to the cash wrap and it's a penny they have the right to purchase it. What do you do in that case? |
Checked into this with a quick email to a Kmart Receiving Lead:
Once the merchandise goes to a penny (usually after a markdown to 90% off, but not always), it is supposed to be returned to the 605 (returns) person, then returned to Genco. If the mdse is still on the floor (one of those "missing in action" types), and it is scanned at the register, the register will prompt for a price -- which, if all of the markdowns had been ticketed on the mdse, would be anywhere up to 90% off the original price. Cashier then enters the ticketed price.
Was also told that, at least in the person's store I contacted, when merchandise goes to that markdown, the store manager lets the employees purchase it for either the 90% off price or something comparable based upon condition.
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vickers
Joined: 14 Jul 2006
Posts: 306
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Posted: Tue Jul 15, 2008 2:55 am Post subject:
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So is that the same as things "going zero?" If thing go zero and a customer wants it, then we give it to them for the last ticketed price.
Sometimes we throw in another 75% off...depends on the manager. Sometimes management will sell VOMs and zeroes for cheap for associates.
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dictators_rule
Joined: 08 Jul 2003
Posts: 4793
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Posted: Tue Jul 15, 2008 3:35 am Post subject: for the register
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I though .01 merchandise at Sears/.01 period was to be used so non-selling stuff could be ordered/transacted through the registers like supplies or refurbished Craftsman tools.
Unless there's a bigger tax advantage to SELLING at a loss as comparted to RTVing.Sounds like a glitch.this should show up on a VOM,
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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Tue Jul 15, 2008 12:13 pm Post subject: Sales of Penny Merchandise to Employees
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Some of you are very lucky that your store coaches will sell the penny goods to employees at 90% off. That just doesn't happen at my store. The lead store coach is under the impression that our store will receive a greater return from GENCO if clearance merchandise is shipped out than from selling it to customers at any price.
Officially, if a price prompt is generated at the register (due to the product the customer has being a penny), we are to graciously inform the customer that the product cannot be sold as it had gone through the clearance process and, having not been sold during that time, must now be shipped back to vendor. Unofficially, if I come aware of such merchandise during a sales transaction, I mentally conceive of a fair price for the product and then discount that figure in half. (No one tracks transaction logs at our store unless money is missing from that register's bag. I'd much rather give the customer a deal than accept the $0.05-on-the-dollar ratio that GENCO will give Kmart for such outdated goods.) Since I run exclusively on perimeter registers, the chances of my being caught giving good customer service in these instances is pretty minute.
Again I'll ask, does anyone know how Kmart/Sears is compensated for the merchandise it sends to GENCO?
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goodole312
Joined: 15 Mar 2008
Posts: 310
Location: I'm Free!!!!!
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Posted: Tue Jul 15, 2008 1:56 pm Post subject:
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i think it varies on what it is ive heard somethings we get full credit for and ive also seen a few things where we sell it off for a buck or two or just toss it since we dont get anything for it
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2doorpost
Joined: 04 Mar 2008
Posts: 123
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Posted: Tue Jul 15, 2008 3:40 pm Post subject:
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| goodole312 wrote: |
| i think it varies on what it is ive heard somethings we get full credit for and ive also seen a few things where we sell it off for a buck or two or just toss it since we dont get anything for it |
The "Policy" varied with the management of that time.
Distressed merchandise went one of three ways-
1) Some sold employees the stuff for a buck
2) Some would donate to charity
3) Some would compact the stuff.
4) Some would do all three
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dictators_rule
Joined: 08 Jul 2003
Posts: 4793
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Posted: Tue Jul 15, 2008 4:33 pm Post subject: 10 cents on the dollar-rTV
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Ive heard numbers such as little as 10 cents on the dollar for RTVd merchandise.There was an effort to get everything sold at clrx right after the 'merger' but that sorta faded.
The big thing with rtv merchandise is how complete is it.Are the packing,accessories and manuals with the merchandise?.It also depends on the agreement with the particular vendor,some vendors don't want store returns,they only want to deal with the customer.
At this point with gas prices and most shipping done by weight it almost pays the company to sell at fire sale prices.The only problem is that it can raise issue amongst the employees especially
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allhandsabandonship
Joined: 28 Apr 2005
Posts: 1640
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Posted: Tue Jul 15, 2008 5:41 pm Post subject: Re: Sales of Penny Merchandise to Employees
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| Solomon wrote: |
| Officially, if a price prompt is generated at the register (due to the product the customer has being a penny), we are to graciously inform the customer that the product cannot be sold as it had gone through the clearance process |
I figured this would be the official Sears response. "Even though you have an item in hand Mr/Ms customer and are ready to give us money, we'd rather piss you off by refusing to sell the item because of inane procedural issues only we can comprehend".
The company is lucky to have some employees who try their best to figure out what makes sense instead of following official policy. This is one of the benefits they lose when they drive experienced "expensive" people away.
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jbdet313
Joined: 03 Mar 2005
Posts: 1493
Location: Michigan
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Posted: Wed Jul 16, 2008 1:00 pm Post subject:
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From what I've been told, Genco gives basically pennies on the dollar for merchandise returned to it. And it used to be only certain items went back to Genco, others made their ways to either the manufacturer or a wholesaler ... BUT nearly everything being "damaged out" or unsaleable is going back to Genco nowadays, from what my Kmart Receiving leads have told me. (Makes me wonder if Eddie has some type of stake or kickback coming back from Genco.)
It's actually a better idea to attempt to sell damaged items than to just send it to Genco. If you could take $20-30 off an item and a customer would take it (and not return it in the end), you are getting more coming into the register than you would be getting from Genco if you damaged it out. A scratched piece of $200 furniture, say you get the customer to take it for $150. Genco would probably only give you 5-6 cents on the dollar for it (and it IS that low on almost all merchandise shipped to it). $150 in the till, vs. a whole $40 on a $200 retail item.
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2doorpost
Joined: 04 Mar 2008
Posts: 123
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Posted: Wed Jul 16, 2008 2:37 pm Post subject:
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| jbdet313 wrote: |
From what I've been told, Genco gives basically pennies on the dollar for merchandise returned to it. And it used to be only certain items went back to Genco, others made their ways to either the manufacturer or a wholesaler ... BUT nearly everything being "damaged out" or unsaleable is going back to Genco nowadays, from what my Kmart Receiving leads have told me. (Makes me wonder if Eddie has some type of stake or kickback coming back from Genco.)
It's actually a better idea to attempt to sell damaged items than to just send it to Genco. If you could take $20-30 off an item and a customer would take it (and not return it in the end), you are getting more coming into the register than you would be getting from Genco if you damaged it out. A scratched piece of $200 furniture, say you get the customer to take it for $150. Genco would probably only give you 5-6 cents on the dollar for it (and it IS that low on almost all merchandise shipped to it). $150 in the till, vs. a whole $40 on a $200 retail item. |
Cut Genco out of the picture and I think you'll hit a nerve somewhere.
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rwarchol
Joined: 07 Feb 2008
Posts: 170
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Posted: Wed Jul 16, 2008 4:58 pm Post subject:
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My HI ASM followed the "rule" to not sell zeroed merchandise. Last winter we had one of those 2-in-1 7ft. game tables that was normally like $799 and was marked down to $299 on clearance. Well one of the associates wanted it but was waiting til we got paid later that week. Well the table went to zero on Thursday and they tossed it in the compactor. Instead of waiting one day and selling it for $300 they threw it out.
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dictators_rule
Joined: 08 Jul 2003
Posts: 4793
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Posted: Wed Jul 16, 2008 5:11 pm Post subject: last known price
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If that table was still in the store and displayed I would've demanded what happens to customers wanting zeroed out merchandise that was missed and give them 'the last known price'.
The asm should've marked it down even lower,at least they would've got something except a higher dumpster disposal bill.If the merchandise really isn't selling you already have problems so just price it to sell it-as soon as possible.What a waste! what else is new?
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2doorpost
Joined: 04 Mar 2008
Posts: 123
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Posted: Wed Jul 16, 2008 7:43 pm Post subject:
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| rwarchol wrote: |
| My HI ASM followed the "rule" to not sell zeroed merchandise. Last winter we had one of those 2-in-1 7ft. game tables that was normally like $799 and was marked down to $299 on clearance. Well one of the associates wanted it but was waiting til we got paid later that week. Well the table went to zero on Thursday and they tossed it in the compactor. Instead of waiting one day and selling it for $300 they threw it out. |
Too big to ship back when it went to zero......bye bye.
I'm still shooting pool on my one dollar slate table and playing air hockey on my one dollar air hockey game.
Ahhhh... The good old days.
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Magnolia
Joined: 26 Aug 2005
Posts: 1369
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Posted: Wed Jul 16, 2008 10:45 pm Post subject:
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Check it out: http://stores.ebay.com/Sears
Sifting through the information, look what I found:
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malva19
Joined: 17 Jun 2008
Posts: 62
Location: nowhereland
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Posted: Thu Jul 17, 2008 12:55 am Post subject: Re: Sales of Penny Merchandise to Employees
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| allhandsabandonship wrote: |
| Solomon wrote: |
| Officially, if a price prompt is generated at the register (due to the product the customer has being a penny), we are to graciously inform the customer that the product cannot be sold as it had gone through the clearance process |
I figured this would be the official Sears response. "Even though you have an item in hand Mr/Ms customer and are ready to give us money, we'd rather piss you off by refusing to sell the item because of inane procedural issues only we can comprehend".
The company is lucky to have some employees who try their best to figure out what makes sense instead of following official policy. This is one of the benefits they lose when they drive experienced "expensive" people away. |
Our policy is if the item is on the sales floor and the customer
wants to buy it we take 75% off the original price. Items on the vom list are usually further reduced, depending on the current management some let it go zero others go crazy and reduce it to almost nothing. But all the departments at Sears
get a vom report once a month they're supposed to stay on
top of it .
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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Thu Jul 17, 2008 1:54 am Post subject:
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| jbdet313 wrote: |
| From what I've been told, Genco gives basically pennies on the dollar for merchandise returned to it. And it used to be only certain items went back to Genco, others made their ways to either the manufacturer or a wholesaler ... BUT nearly everything being "damaged out" or unsaleable is going back to Genco nowadays, from what my Kmart Receiving leads have told me. (Makes me wonder if Eddie has some type of stake or kickback coming back from Genco.) |
Is the "pennies on the dollar" practice also the return on merchandise that is sent to GENCO "RD" (for "discontinued")? I always suspected that reality, but for a confirmation from someone "In-the-Know" on this topic really boggles my mind. The merchandise, otherwise, is in excellent, "sellable" shape - yet all Kmart/Sears gets back is a nickel on the dollar (basically). What a joke!
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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Thu Jul 17, 2008 1:59 am Post subject: Re: Sales of Penny Merchandise to Employees
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| malva19 wrote: |
| Our policy is if the item is on the sales floor and the customer wants to buy it we take 75% off the original price. Items on the vom list are usually further reduced, depending on the current management some let it go zero others go crazy and reduce it to almost nothing. But all the departments at Sears get a vom report once a month they're supposed to stay on top of it . |
What is a VOM report? Kmart does not have these. We simply are given several hundred (or a few thousand) Price List Changes (PLCs) daily in which each store's one price change associate must find the merchandise for to reticket. When a product goes to a penny, it is treated as just another PLC found in the computer - no special reports are generated. If the PCL associate finds the product, instead of reticketing it (s)he is to give it to 605/Processing to be shipped out as an RD to GENCO.
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In HarmsWay
Joined: 22 Jan 2008
Posts: 115
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Posted: Thu Jul 17, 2008 2:19 am Post subject:
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| terminator wrote: |
| If a customer goes to the cash wrap and it's a penny they have the right to purchase it. What do you do in that case? |
Term, you know that doesn't happen very often...we usually know when an item will "Go To Zero", as we call it....we often do a last markdown, in an attempt to sell it, before it is classified as "return to vendor"...sometimes it benefits us, who work here, as we all need every penny we can scrounge to survive, if we can catch an item on it's final markdown, that is fair, and ethical, and it does help our budgets...yes, we would like to buy stuff where we work, and times are tough, budgets tight...
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Solomon
Joined: 10 Jul 2008
Posts: 50
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Posted: Thu Jul 17, 2008 2:23 am Post subject: Sears' eBay Account
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Heh-heh: I just sent an email to searscsr@genco.com inquiring, among other things, if the Sears eBay account is maintained by SHC or GENCO. Let's see if I am blessed with a response. (Note: I will be away from a computer for the next few days so if a reply is given quickly I will not be able to acknowledge it here in swift fashion.)
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Magnolia
Joined: 26 Aug 2005
Posts: 1369
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Posted: Thu Jul 17, 2008 4:23 pm Post subject:
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Please let us know what they say, Solomon.
Looking at the site, right at the top, they certainly make you believe it's a Sears site...
... including:
| Quote: |
| Welcome to Sears! Since 1893, Sears has been a name you can trust. We now accept PayPal! |
Yet their email is directed to Gemco. Very interesting.
Looking at the accepted payment types:
Please Note: All items must ship to the billing address of the credit card used for purchase. We can in no way make any exceptions to this policy.
Accepted Payment Forms:
PayPal
Visa
MasterCard
Discover
**Note: Credit cards must be issued by US banks
We cannot accept
Sears Gift Cards
Cash
Checks
Money Orders
Sears Credit Card
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Nofsdad
Joined: 06 Jul 2003
Posts: 6742
Location: Central CA
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Posted: Thu Jul 17, 2008 4:35 pm Post subject:
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RETURN ON RETURNS
From way back in '03:
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RETURN ON RETURNS. Like every other retailer, Sears is in the business of pushing sales out the door, not pulling them back in. And yet, the retailer has put in place technology that enables it make money on that which its customers bring back, as reported by Kim S. Nash in Baseline magazine (Jan 03). "Returns can actually be profitable," says Prof. Dale Rogers of the University of Nevada at Reno. "It sounds crazy but it's true...It has become an objective for a lot of enlightened firms."
The challenge for Sears, typical of most retailers, is that every supplier has a different set of standards regarding returned merchandise. Some want the stuff "sorted by type of product" and another wants stuff back "only when the pile hits a certain dollar value or number of units." But for Sears, with some 10,000 suppliers and 2,900 stores, the chaos was a real losing proposition, to say the least. So in 1993 it engaged Genco Distribution Systems to put in place "reverse logistics," and "since 1999, Genco has processed at least 23 million returned items every year for Sears."
Genco not only built a database of supplier returns protocol, but set up three warehouses from which all returns are processed. Sears simply hands the whole arduous process off to Genco. Store personnel just piles up the returns, unsorted, on a pallet and calls Genco to come and pick it up. Genco estimates that "centralizing and outsourcing returns can cut in-store labor to about 10 hours per week per store...Annual benefits -- increased manufacturer credits, fewer labor hours on the chore, more cost-effective shipping -- are pegged at $4 million per year." Clay Valstad of Sears actually won't confirm exactly the profitability of reverse logistics for the retailer, but confirms: "In addition to recovering significant dollars in vendor credits or through recycling, we are able to recover all the costs of running our reverse logistics program."
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