MINNEAPOLIS, April 1, 2005 — Best Buy Co., the nation’s biggest consumer electronics chain, said Friday its fourth quarter earnings rose, buoyed by a February sales surge, but offered a disappointing forecast for this quarter. It also said it will phase out mail-in rebates over the next two years, bowing to customer complaints. Its shares fell more than 6 percent. The rebates have aggravated regulators, too. Wisconsin consumer protection officials last year looked into the rebates after 89 consumers complained, and Ohio Attorney General Jim Petro sued Best Buy in August in part over complaints about rebates. Chief financial officer Darren Jackson said in an interview that the actions of regulators were not a factor in the decision.

Consumer advocates at Household – HSBC Watch said the phase out of rebates will also effect HSBC (Household International) since they will not be able to finance products at the before-rebate price. It will also make ongoing compensation agreements between HSBC and Best Buy easier for regulators and investigators to follow, according to the group. HSBC is the financial issuer of Best Buy’s store credit card and is the new name of predatory lender Household International. HSBC bought Household in 2002.

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