Depending on how you look at it, there may be bad news in the air for Best Buy (BBY) customers...and we aren't talking about the stock. (For the latest on a similarly named ticker, Bed Bath & Beyond (BBBY), head here.)
Best Buy's stock has been a relative bright spot recently, gaining nearly 19% in the past 6 months. Compared to the S&P, Best Buy has outperformed the market and several analysts have upgraded their ratings in anticipation of what could be a relatively strong holiday sales season in its upcoming earnings report.
Best Buy's Online Presence Still Lags
The numbers may seem optimistic, but Best Buy still gets a bulk of its sales from brick-and-mortar stores -- not exactly a bullish signal for a tech outlet in 2022. In its Q2 2023, Best Buy actually saw its online sales fall by nearly 15% compared to the same quarter a year prior, and 42% of its customers still preferred to pick up their orders in stores.
For comparison, Apple grew its online sales business by 97% over the past two-year period as it tries to pivot away from the pricey business of traditional retail.
Best Buy Customers May Not Like the New Changes
Best Buy is making some new changes to their popular rewards program, My Best Buy.
For background, My Best Buy is a benefits program where members earn points with every purchase they make. With every $1 spent, My Best Buy members earn .5 points to use toward a future purchase. The rewards program also gives members access to exclusive savings events, protection, service information and more benefits.
Until now.
Starting in February, My Best Buy rewards members will now get the sought-after free shipping benefit with no minimum purchase. But there's a catch.
My Best Buy will no longer offer its points rewards system unless members hold a My Best Buy credit card.
The terms are as follows:
Starting February 14, 2023, earning points on eligible Best Buy purchases will become an exclusive benefit of the my Best Buy Credit Card. To continue earning rewards on your Best Buy purchases, you can apply for the My Best Buy Credit Card and earn 10% back in rewards on your first day of purchases.
Plus, for a limited time you can ear a $110 reward certificate when you apply, are approved for, and spend $100 on your new My Best Buy Credit Card. Activation required, offer ends February 13, 2023.
The change comes as Best Buy works to increase its online sales, ostensibly through an unlimited free shipping benefit not previously afforded to customers. But putting those rewards behind a barrier (albeit sticky) credit card ecosystem is risky business that many customers probably won't like. Other retailers have made similar moves (see, Apple Card, Amazon (AMZN) Rewards Card, in partnership with Chase (JPM)), with mixed feedback and results.
