Things have been bad at retail chain GameStop for a while now but somehow they’re about to get even worse. Employee benefits are on the chopping block heading into next year as the gaming retailer doubles-down on cost-cutting despite holding $1 billion in cash reserves thanks to its earlier meme stock explosion. The company’s Pro membership program for customer discounts continues to slash its perks, too. And staff now report that they’re being told to replace new warrantied products like PlayStation 5s with used ones.
GameStop employees are tracked on how many warranties they get customers to buy on everything from video game discs and controllers to brand new $500 consoles. While the company has always maintained in its warranty terms that it has “sole discretion” over whether purchases are replaced with new, used, or refurbished merchandise, staff say new policies are requiring them to only offer used replacements, and to send customers driving to other stores if they don’t have the used replacements in stock.
For example, you might buy a standard PS5 from GameStop for $500. The store will then try to upsell you to the 1-year replacement plan for an extra $55. If something then breaks or malfunctions with the console that’s covered under the warranty, GameStop will give you a used PS5 which it normally sells for $460 instead. “I definitely ain’t sending people to neighboring stores to waste their time,” one person wrote over on the GameStop subreddit. “It’s such a disaster. Half the preowned we get is either broken, or was in the home of a smoker.”
GameStop Pro rewards are about to get more useless
GameStop’s recently revamped Pro memberships are also getting worse starting December 1, based on an email seemingly from store operations specialist Bryan Perez outlining new changes that was shared on the subreddit. Starting December 1, the program’s free monthly $5 coupon will no longer work for gift cards or digital goods. Welcome points benefits for new members will go down from 10,000 ($10) to 5,000 points ($5) and renewing members will get nothing instead of the $5 that was previously offered. The annual price will remain $25, however, after it was raised from $15 earlier this year. Why are we changing the $5 Monthly reward?” reads the email. “To improve the profitability of the Pro program.”
Finally, GameStop is taking a hatchet to employee benefits. Staff members were informed yesterday that their healthcare costs would go up in 2024 and the company would be ditching benefits like basic life insurance, accidental death and dismemberment, short and long-term disability, and matching 401k contributions. It’s not clear how much the health plan costs increased from 2023, but a copy of the new benefits shared with Kotaku shows a $850 deductible plan for a single individual will cost $377 a month. The same plan for a family will cost $1,129.68. According to two current employees, this would double their annual health insurance costs.
The latest cuts have renewed internal criticism of online pet food mogul turned meme stop cult-of-personality, Ryan Cohen. After overseeing a series of layoffs, executive level departures, and c-suite firings since joining the board of directors in 2021, Cohen appointed himself CEO earlier this year. In his first email to staff after taking the position he excoriated “delegators and money wasters.”
Last month, Cohen promised every player on the Texas Rangers a $1,000 GameStop gift card if they won the World Series, which they did in game five against the Arizona Diamondbacks last night. “Wonder if this [tweet] was before or after he decided to cut insurance and 401k benefits,” wrote one commenter on the GameStop subreddit.
GameStop did not respond to a request for comment.
Update 11/2/2023 12:47 p.m. ET: Added more information about GameStops’s 2024 health insurance premium increases.
Correction 11/2/2023 2:34 p.m. ET: A previous version of this article said Cohen promised $10,000 gift cards. The ammount was $1,000.