Advertisement

Archive for Sunday, December 14, 2008

Shoppers should scrutinize warranty offers

Product quality, longevity affect overall value

December 14, 2008

Advertisement

Reader poll
Do you regularly purchase the extended warranty on an automobile or electronics?

or See the results without voting

So you are finally going to do it.

You just told the sales clerk you are ready to buy that 50-inch plasma television you’ve been wanting. You can’t wait for it to be delivered and set up for your Super Bowl party.

Next question from the clerk: “Can we interest you in our extended warranty? It’s only a few dollars more and you’ll have a couple of extra years of protection.”

The clerk has you at a weak moment during the transaction.

“These tend to get offered at times of high emotion,” Kansas University associate business professor Dennis Rosen said.

There are a lot of factors to consider about warranties, he said. You should understand the details of the warranty that comes with the product before deciding whether to purchase an extended one. Ask the clerk if you can still buy the extension after thinking about it for a few days. Then you can conduct your own investigation, such as calling repair shops or searching for information on the Internet about repair problems or longevity of a product brand, Rosen said. You could do that research before buying the product, too, he noted.

“With electronic devices, the way technology is improving and prices are going down, in three or four years you might not care about that product anymore,” Rosen said.

You also might try negotiating with the store over an extended warranty. Maybe you can get them to throw it in for free or at a reduced price. Profit margins on extended warranties are as much as 60 percent to 70 percent, Rosen said.

“With that kind of profit margin, they can afford to negotiate,” he said. “Everything is negotiable. It’s worth trying.”

Kansas and many other states have implied warranty laws. That means that a product has to perform as it is advertised.

“If you buy a high-dollar TV and it goes down in a year, is it functioning properly? An implied warranty can give you additional protection,” Rosen said.

Dealing with extended warranties is mostly a matter of keeping your eyes open and thinking about whether the warranty is likely to pay off, Rosen said.

“What people are buying is peace of mind, and for some people it’s worth the money,” he said. “We shouldn’t be buying it with the thought that the new product is going to break down immediately. If we’re buying a quality product, it shouldn’t break down.”

Comments

gerbilsniper 6 years ago

I would also tend to research the business repair, return ,and refund policy first. Sometimes it's on the company's website and other times you can find it at customer service. Stores like wal-mart have a very broad return and refund policy. While you may not get the most knowledgeable sales staff, you can most certainly save a few dollars. Save the headache and research your products before hand. CNET.com is a great resource for electronic reviews because usually the include videos, editor reviews ,and reviews from customers who have bought the product and also giving you the option to view similar items.

overthemoon 6 years ago

probably ought to consider the possibility that the store may not be around in two years. think circuit city. what happens to those warranties?

Brandon Perkins 6 years ago

First of all...if a company goes out of business you are still protected by their insurance with the extended warranty/service plan. I work at Best Buy and our Performance Sevice Plan are all covered through a 3rd party so if Best Buy were to go bankrupt, then the consumer would still be covered.So you did just purchase a new TV. It stops working 18 months into you owning it. The manufacturer warranty is 1 year. Now what do you do. Are you going to fork over the money to have a 3rd party fix it? Do you have that money? Extended warranties/service plans help cover your product from issues that may arise that the manufacturer does not cover above & beyond including dropping, cracked screen, water damage, etc.This time of the year someone always has to do a story like this...

reginaflangie1 6 years ago

The warranty in only good if the business is still around.

yellowhouse 6 years ago

Warranty's are a tricky thing. You want to warranty the item but you don't want people to bring items back just because they found a better deal somewhere else!

yellowhouse 6 years ago

At yELLOW hOUSE we offer a 60 day service warranty on our Major Appliances. We also offer an exchange warranty should the buyer opt to just get another machine.On our electronics we offer a 30 day exchange. So even used stuff can carry a warranty!

Commenting has been disabled for this item.