QUOTE(cory1492 @ Jan 28 2008, 11:18 PM)

Maybe the $$ number is inflated but the idea isn't a rumor. I've had a couple discussions with CSR's at local stores like best buy and futureshop here in canada that suggests the contract which allows them to sell the 360 is seriously against the chain - for example, if M$ finds that a particular batch has a high failure rate, though a newer batch is currently shipping, they outright refuse returns from the stores of that lot number (and yeah, that has happened here on a couple lots according to the best buy guy I was talking to.) Basically, the retailers have a choice, take it up the wazoo and agree with the contract that allows M$ to do this - or don't sell the 360.
We get the same short end of the stick when we buy anything M$ sells, too (including live membership and their "you pay, we don't provide the service, not our fault" clauses.)
On a side note, the 2 EB's closest to me (again, this is canada) haven't restocked on 360's yet either - not entirely sure if they will be now. They've been out of machines since before Christmas rush apparently. Also, to those of you drooling with the piles of consoles dancing in your brain... EB usually has contracts with local repair people to deal with that stuff so they can resell nonreturnables as used decks - if you are into doing repairs live down under you might want to talk with the manager and see if they currently have anyone who is willing to turn over 360's for repair (though I bet they won't give you jack all for your work but expect godly qualifications to boot...)
We keep hearing these stories, but there's never any actual substance. Usually others have "heard" this from friends or from managers at places they work.... but again, litte or no substance.
Microsoft couldn't do business like that. Ever.
More likely, EB is sitting on a stock of returned 360s that have warranty stickers removed or tampered, and they shouldn't have taken them in. Likewise, the buyer should be returning genuinely defective, under warranty, units directly to Microsoft, not to EB games. They should be directing the customers to Microsoft, instead of taking defective units back.
Beyond that, "open box" returns that are supposed to be non-defective should be checked out, and surely EB games has facilities at every store to check them out.
Again, I call shenanigans. Microsoft has had design issues, some quality issues (bound to happen when you manufacture in China), but they are handing them - why piss off retailers and consumers?