Newegg Controversy – Selling Known Faulty Products

It has been a tough week for Newegg the PC retailer and dedicated global tech marketplace after they were accused of selling known faulty products and then refusing to refund customers for them. The controversy started when the popular tech platform, Gamers Nexus, which at the time of writing has over 1.58 million subscribers on their YouTube channel, bought a motherboard from Newegg for an upcoming PC build.

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When they decided that they wouldn’t need the motherboard, and returned it to Newegg for a refund they were shocked to find out the refund had been declined and they were being accused of damaging the product.

Now, if you are interested in the full story and how it has all unfolded Gamers Nexus has done a thorough deep dive into the whole incident on their YouTube channel (Not good news for Newegg) At the time of writing their videos on this debacle have roughly 5x the average views than there other recent videos.

Where Newegg Went Wrong

This story is interesting to me as I first started out my eCommerce journey working for one of the UK’s leading independent electronics sellers online and they specialized in refurbished products. Therefore I know the processes involved with faulty items being repaired, tested, and resold very well.

In my opinion and experience a company with the size and experience of Newegg, it should be next to impossible for a faulty product to be put up for sale. There should be numerous checks and safeguards in place to stop that from happening because a bad customer experience that leads to negative feedback or bad reviews is the worst thing in an industry where an additional level of trust is needed when purchasing a product.

This leads to the question was this intentional? Whilst extremely unethical, bad business practice and I’m sure illegal, were they hoping to sell faulty goods to their customers and if they attempt to return them, blame the customer for damaging them due to the intricate and delicate nature of computer parts? Whilst this may sound like the kind of tactic from some lowlife eBay scammer, it seems a ridiculous thing to allege from an established company like Newegg.

The problem is that Gamers Nexus has managed to thoroughly research the incident and managed to track down the RMA (Return Merchandise Authorization) number on the product he bought from Newegg. He then managed to contact the repair company that issued the RMA and asked for the report log on the RMA which confirmed that the fault of faulty socket connectors was identified and the repair cost to Newegg was $100. It then turns out that Newegg refused the $100 repair, the product was returned to them…where it was just listed back for sale with no further intervention.

Now whilst mistakes can certainly happen in business, it shouldn’t have taken long for anyone at Newegg to be able to access the history of this product when Gamers Nexus wanted to return it for them to notice what had happened and be grateful that they dodged a bullet. This is where the whole thing stinks…did they see the opportunity to blame the fault on a customer to try and maximize their profit and avoid them taking a loss on that product? We may never know the true answer to that question. The fact that the question has been asked is the most damaging thing to Newegg as a brand.

Newegg Responds With Updated Policies

After the nuclear fallout from the Gamers Nexus-sized missile that rocked Newegg over the last few days, the company has responded by updating its returns policy. The company posted a statement on its Twitter page.

A Newegg spokesperson added that they’ve created new policies to ensure a “hassle-free” return experience on all “open box” merchandise returns for motherboards and CPUs. When asked exactly what those policies entail, Newegg confirmed that they intend to accept all returns on “open box” products on a “no questions asked” basis.

Having worked in the industry I can testify that of course mistakes happen, but it shouldn’t happen to a company as established as Newegg. Whilst we can applaud that they have seemed to rectify the situation and stop this from happening again in the future, the true test will be how much damage has this done to their reputation and trust as a retailer and marketplace.