Gateway and Customer dis’ Service

Posted on Sunday 2 April 2006

I was reading a post over at Cavemonkey50 technology blog. It was about bad customer service from Gateway computers. I’m really not surprised. I had a run-in with the quality of their customer service a few years ago—I’ve posted the story here again, from my website archives.

Customer Disservice

Saturday, December 13th, I spent the day with a friend, rebuilding her computer. Last December, she bought a Gateway 500X computer. This past August, she had a problem with it. She had her PC connected to a cable modem and during one of last summer’s thunderstorms, lightning hit the cable system, traveled through the coax cable and fried the cable modem and her computer’s motherboard.

Not knowing exactly what was wrong with her PC, my friend called Gateway. She told them what had happened and they asked her to send it to the repair depot in Arizona, pay $129 to have it diagnosed, and pay for shipping it both ways. She didn’t know how long shipping it to the repair depot, having it diagnosed, getting it repaired, and then having it shipped back would take and thought that taking to the local Gateway store and having it diagnosed there would be faster. They told her that was an option.

So, she took the Gateway 500X PC into the Gaithersburg Gateway store. She told them what the situation was, and paid $99 to get a repair estimate and diagnosis. The Gaithersburg Gateway store told her the motherboard had been damaged by the lightning strike and would need to be replaced. The repair department also told her that a replacement motherboard was going to cost $350 and that, because her machine was damaged by a lightning strike, it wasn’t covered under warranty. She agreed to pay for the part.

The repair department then told her they weren’t sure if a part was available, but that they would check. After a few rounds of phone calls, my friend was told that the part wasn’t available for non-warranty repairs as they were being reserved for warranty repairs. Then she was told that she might be better off buying a new computer. This was in September.

After many phone calls and e-mails between my friend, Gateway, and the Gaithersburg Gateway store no progress had been made. Finally, about two weeks ago, my friend received an e-mail saying that a part might be available. Almost four months had passed since the machine was first brought in for repair, and it still wasn’t working. She called me earlier in the week and asked for my help.

Saturday morning, about 1030, I arrived at her house. I took a look at her Gateway 500X and realized that it was a Micro-ATX motherboard, but the video card, modem, memory and CPU were probably okay, but the motherboard was fried. So, my friend and I went to a local computer store and I picked out a new motherboard. I selected a Soyo Dragon P4 ATX motherboard since I didn’t like the selection they had of Micro-ATX motherboards, so we had to buy a new tower case as well. They had a 10-bay ATX case with two front USB ports for $30. I also picked out a new surge suppressor, an APC unit with 10 outlets and surge protection for coax cable, ethernet and telephone connections. The last item we got was a small gateway/firewall router. All of this cost about $200.

We went back to her house. I then took her Gateway 500X apart and removed the CD-burner, the DVD drive, the hard drive, floppy drive, video card, modem, memory and CPU. I moved the CPU over to the new motherboard and installed it in the new case. I hooked up the case leads, the power connectors, and installed the memory, video card, modem and drives.

I then powered up the new machine… it booted into Windows XP Home, and told me it needed to be activated. I called Microsoft and entered the activation key. We were back up and running.

We ended up repairing it, in fact upgrading it to a more capable machine for about a third of what the repair would cost. The motherboard and case were about $140 dollars after taxes. The new Soyo motherboard can handle the new 3.2 GHz Hyper-threading P4 processors and DDR 533 bus speeds, and has serial ATA capability on-board. The new sound card is 5.1 Dolby surround capable, not just stereo sound. The new case has six free drive bays and four free PCI slots, not one bay and two slots. She’s happy with the new machine— but still unhappy with Gateway.

The real issue I have with this whole episode is this:

The Gateway store charged my friend $99 for a repair estimate but wouldn’t sell her the parts needed to complete the repair. Most places, the diagnostic fee (the $99 in this case) is usually applied towards the overall cost of the repair, should the customer go ahead with the repair. In this case, my friend was willing to pay the additional $350 or so that Gateway told her the part would cost, and probably be charged to install it. So for a minimum of $450, her computer would be repaired.

The technician had hinted that if my friend had come in with the machine and said, “I don’t know what happened, but the machine just isn’t working,” the repair would have been covered under warranty and the repair would have cost her nothing. Instead, my friend was honest, because that’s who she is, and told the store the truth, was charged $99, and gotten nothing in return. She was willing to pay for the repair but was denied the parts she needed, because she told the truth, and the repair wasn’t covered by the warranty.

This is a perfect example of where customer service has gone wrong—something that happens all too often today. Gateway had a chance to make a profit— she was willing to pay their over-inflated price for the part, as the motherboard isn’t worth more than $75, and for the installation. Gateway had a chance to keep a customer happy—as she’d have a working machine four months earlier than she did.

Instead, Gateway has lost a customer—I’m pretty sure she won’t ever buy another thing from Gateway—and lost some of the profit they could have made, and returned nothing for the $99 that she was charged.

Furthermore, Gateway has lost most of her friends, family and business associates as possible customers. If you were charged $100 by a company and basically told, “We would charge you through the nose for the part you need but we won’t sell you the part because you told us the truth,”would you buy from that company again? If you were friends with someone who went through this, would you buy from that company? I certainly wouldn’t, and I don’t think you would.

Ted Waitt wonders why his company, Gateway isn’t more successful. It may have a lot more to do with how they treat the customer than it does with the quality or price of their products. Needless to say, this isn’t necessarily the typical computer repair experience. I’ve had good experiences with Toshiba, Apple, and IBM on repairs.

I’d also like to point out that Gateway no longer has any retails stores. The only computer manufacturers that seems to have made a success of its own retail stores is Apple.

1 Comment for 'Gateway and Customer dis’ Service'

    April 2, 2006 | 2:21 pm

    Wow, that really sucks. It makes me glad I decided to repair my Gateway computer myself. I would have hated for it to ship to Gateway, only for them to charge me and not fix the problem.

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