GameStop Sells Played Games As New, Sources Say, Practice Could Be Illegal

The alleged practice of GameStop lending new copies of games to employees at their stores and then later selling those games as new, unused copies, may be a violation of federal law.

GameStop's "check-out" policy, confirmed to Kotaku by a number of the chain's managers and employees, could fall under scrutiny of the Federal Trade Commission.

Reached for comment this afternoon, GameStop officials declined to comment.

"We do not comment on corporate policies that are competitive in nature," said Chris Olivera, vice president of corporate communications. "As your questions relate to company training, operations and discounting practices, I would not be able to provide feedback."

Kotaku contacted the FTC earlier today to determine if the practice, which sells games already played by employees at the new price, not the used price—used titles are typically priced about US$5 cheaper than brand new versions—would be considered deceptive advertising or marketing. The FTC's Bureau of Consumer Protection is mandated to protect consumers against unfair or deceptive acts or practices in commerce. Violations of FTC restrictions are a violation of federal law, according to the commission.

"The Federal Trade Commission protects consumers from unfair or deceptive advertising and marketing practices, and we encourage any consumer with a complaint about a company's business practices to contact us," said FTC public affairs specialist Betsy Lordan.

Lordan said she was unable to confirm or deny the existence of any investigation that the commission is conducting. As a rule the FTC does not comment on the conduct of a particular business.

The company's check-out policy, provided to us and verified by a number of GameStop employees states:

Associates are allowed to check out one item of store merchandise for personal use for up to four days. Merchandise checkout is a privilege, not a right, and may be revoked at any time.

Hardware, accessories, sealed CDs or software programs that must be altered to install may not be checked out. If the on-hand quantity of a product equals one, the item cannot be checked out. Hot titles may also be prohibited from being checked out, regardless of the on-hand quantity in the store.

Associates may only check out items from the store in which they work. Associates are personally responsible for any merchandise they are allowed to check out.

Merchandise must be properly checked out in the Employee Merchandise Check Out Log in the Game Planner.

If the product is returned in unsellable condition, or if anything is missing from the package, or if the product is not returned, the Associate must purchase the product at the current price less Associate discount.

Copying of the software and/or manuals/instructions is illegal and is strictly prohibited. Merchandise that leaves the store without being properly checked out or purchase is considered to be unauthorized removal of Company property and may result in performance coaching up to and including termination of your employment.

According to a number of GameStop employees and managers across the country, all of which spoke to us on the condition of anonymity, new copies of games rented out to employees are often mixed in with the unplayed display copies. And both are sold at "new" prices.

When a shipment of video games initially arrives at a store, managers are told to "gut" several copies of the game, removing the disc or cartridge from the packaging so it can be displayed on the shelf without concern of theft, according to our sources.

The games are then placed in protective sleeves or cases under the counter. If a customer asks why the game is not sealed they are typically told the the game is a display copy. The game is still sold as new.

When check-out games are returned, we were told, they are placed with the gutted display copies. If a customer asks about these, they are typically told they are display copies, not that they have been played before.

Since the copies are often placed with display copies, even managers and employees typically don't know which of these games have been played and which haven't.

While some GameStop managers will on occasion offer a "Shop Worn Discount" for a gutted or checked out title, we are told by our sources that this is actually against GameStop policy which states:

"Do not apply Shop Worn Discounts to any new, used or checked out games, it may only be applied for damaged packaging and new accessories which have been opened."

Headquartered in Grapevine, Texas, GameStop is the world's largest video game retailer, operating nearly 6,000 stores worldwide. The company's revenue was $8.8 billion in 2008.

Michael McWhertor contributed to this story.


Comments

    In the past there has been instances where 'new' EB games that had save ram eg GBA carts had save games on them so this is not exclusive to Gamestop.

    @ CyK:
    GameStop is EB Games - they're the same company, just different names for different regions. And as far as I am aware, this practice isnt part of the companies "policy". In fact if staff were found to be "borrowing" games then i dont think they'd keep their job for very long.

    @CyK: To the best of my knowledge, EB Games is actually owned either by Gamestop or by a larger company that also owns Gamestop, so I would not be surprised if they had the same or similar policies.

    I recently made the odd decision to repurchase a game I had returned to EB games, a DS game. The game I picked off the shelf was advertised as new and it still had my game saves on it. No suprise there.

    I really don't know how people can still consider this news.

    Do none of you ever think about the 7 day return policy offered by such companies? Do you think that companies would take a hit and sell something like that pre-owned when they can sell it for the new price?

    With a majority of games, as long as the disk is in pristine condition, they can get away with it. It's only with DS/GBA games and lazy/forgetful staff where you'll have any sort of evidence of the game being played before you brought it.

    Games that are returned under the seven day product trial are still considered 'new'. Basically, customers can return games under this product trial if the disc is in perfect condition.

    @Drunkspleen: EB Games and GameStop merged in 2004 and the EB Games name fell under the GameStop Corp. umbrella. While EB Games still has stores in Australia, the end superior is GameStop in America, and always will be. In the end, Dick Fontaine (GameStop CEO) is the overall superior. The only reason why EB Games stores are not rebranded as GameStop stores here is that GameStop in America has a (sort of) bad reputation, and EB Games has worked over the years to attempt to build a good reputation with Australians.

    As for the borrowing of games in EB Games Australia - don't expect to keep your job, as it is classed as theft of company property, which can result in disciplinary action and/or up to termination of employment.

    I used to work for EB games and i can tell you if we borrowed a game all hell would have gone down!

    Its true we did sell games that had been used before such as if the game had been returned and was still in perfect condition.

    If you don't want a game that could have been played before customers are allowed to ask to have a sealed games and if we don't have any in stock it's really the customers choice if they buy the game.

    So what's to be done? I don't know the if law in Australia dictates that if a game's been bought then returned it can still be classified as 'new', regardless of its condition: if it's not wrapped in plastic - and I don't mean shrink wrapped which can be done in-store, rather manufacturer wrapped - then it's not new. If it can't, then EB/GameStop, as well as GAME, will have to cease offering that service, which is one of the major attractions of shopping there. While the system's open to abuse, it is peace of mind for punters who don't like a game (or have given a game as a gift ) and can exchange it or get their money back.

    The article states: "When check-out games are returned ... they are placed with the gutted display copies. If a customer asks about these, they are typically told they are display copies, not that they have been played before."

    One could argue that a game that has been 'checked-out' is still a 'display copy'; it's feasible that a display copy is used in-store on a console to show that particular game in motion. If staff are using (i.e. playing) 'display copies', they are increasing their knowledge about the product they sell which is beneficial to that business.

    However, as other posters have mentioned in the past ('hi' to pedantics, if you're reading), "if [the case has] been opened, IT'S NOT NEW!" and "I have a fundamental problem with buying anything unsealed," but are still willing to take that game back, used and opened to the store they bought it from and expect a full refund. You can check that discussion out at this url: http://www.kotaku.com.au/games/2009/01/eb_catalogue_reveals_few_bargains.html

    Ultimately, a game that has been bought then returned isn't 'new' - it's been used. Just like clothes you buy from a department store, if it doesn't have the labels still attached and if there are signs the garment's been worn, it can't be classified as new. Solution? EB et al could knock 5% off the price, say, of the new 'checked-out' copy because it is has been and is 'used' but probably still in near-perfect condition, then increase the difference on the pre-owned price of a game - it's insulting when a pre-owned game is only $5 less than the cost of a brand new copy that might be used anyway if it's gutted stock - to make a significant and attractive difference in the price of pre-owned versus new to the customer. An independent chain in Wollongong used to give a pro-rata refund if a customer bought a game then returned it, something like 90% if it came back seven-to-10 days after purchase, 75% if returned 12-15 etc. They would then reduce the price of that copy on the shelf to show that it was still relatively new to the store.

    Of course, I really doubt this would ever happen, as EB are trying to wring as much cash from your pockets as they can and would see the above suggestion as the anithesis of their business model. Honestly, I think they'd shift more copies if the prices were a touch lower and fairer, thus making more money in the end, and me despising them less, though I don't think they really care about that.

    Oh, and like Chicken&Chips said, while staff at EB in Aus can't 'check-out' a game, they can do as customers do: buy it, play it, then return it, otherwise taking a game without paying is classed as theft.

    I get annoyed when I pay full price for a game and get a display copy but from a recent trip to to US I can tell you it is a lot worse here in Aus. In the US I visited different stores (Wallmart, Best Buy, Gamestop) and from purchasing games from these places not once did i get an unsealed copy. One game at gamestop was gutted but I decided not to buy it, no biggie. But here in SA, Game and Myer are the only stores I can think of that regularly seal there games. Sometimes EB prices are good but out of all the times I have shopped there I have only once got a sealed game.

    I really dont see a problem with buying display copies...as long as you have the game right?

Join the discussion!

Trending Stories Right Now