Here’s some good news from the Seattle Times, fewer consumers are buying extended warranties. Even though Americans will spend $6 billion on extended warranties for electronics, the popularity of said warranties is waning.
Best Buy recently disclosed in its annual report that extended warranty sales as a percentage of revenue fell 12 percent during the past fiscal year. At Circuit City, warranty sales last year fell 8 percent as a percentage of revenue.
The declines are welcomed by consumer advocates, who have long argued that extended warranty contracts, also known as “service contracts” or “protection plans,” are too pricey and often unnecessary.
“There appears to be a growing awareness that these are a sucker’s bet,” said Tod Marks, a senior editor at Consumer Reports magazine.
Hooray! The word is getting out. Don’t fall for the warranty sales pitch.
“The odds that you’re going to need an extended warranty is extremely rare,” Marks said.”The best idea is to take the money you would have spent on a warranty and put it in the bank.”
“In the unlikely event that something goes wrong, then you’ve got the money to repair it. And if nothing does go wrong, then take your spouse out to dinner.”
Consumerist recommends buying expensive electronics with a credit card that offers free extended warranty protection.
More electronics buyers skip extended warranties [Seattle Times]
(Photo:Maulliegh)
I’ll get warranties on high-use prone to failure expensive items. when I buy a laptop from Gateway, I purchase their warranty. It has paid for itself everytime. Ditto warranties on appliances like dryers and dishwashers.
I avoid pointless warranties. Every new car stereo or set of speakers I’ve bought I’ve been offered (and refused) the warranty.
I work in the industry and I have found that extended warranties can come handy especially on high dollar items, i.e. computers and TVs.
I see hundreds of claims under these extended warranties get filed every month.
It makes since to spend an extra 100 – 400 dollars to protect an investment when the original equipment manufacture only warranties most items for a year
Extended warranties are definitely worth it on computers, expensive mp3 players, and ESPECIALLY cameras. I am a Geek Squad Agent by the way.
On cameras you can get up to a 4 year plan on it, and if it needs to be repaired 4 times, instead of doing the 4th repair the service center will have the store replace it. In 4 years time that could definitely be possible. Sometimes if the cost of repair exceeds the cost of a new item, they’ll just have the store replace it as well.
Also, make sure you actually read the brochure instead of listening to the salesperson, because he’s not going to go over every single minute detail. Don’t be a moron, there is no way the service plan covers EVERYTHING, no questions asked, when they give you a brochure with the inside filled with small print.
On computers it covers the computer itself, not Windows or any installed program on it, there are no warranties for that sort of thing. Also backing up your data is not coverered since it is something you should be doing anyway. People put too much trust in their equipment, and they definitely shouldn’t be if they have sensitive information they cannot lose. Learn to keep a copy or two of it somewhere. You’ll thank yourself later.
When I return a repaired item to the customer I always let them know how much their repair would’ve cost had they not been covered under warranty. They realize it pretty much pays for itself if you ever need to use it.
I am having a very bad experience with Circuit City’s Advantage Protection Plan.
I purchased the Advantage Protection Plan from Circuit City on a camcorder. The camcorder was an open-box item; a return or display model. Naturally, it carried the manufacturer’s warrany, but I opted for the Protection Plan since I figured this higher-risk item would be covered longer and against accidental damage, not just manufacturing defect.
Around Christmas, it fell off a shelf onto a concrete floor, damaging the unit. I was afraid my warranty was expired and pleased to discover it still had a little time left (the plan was 25 months, not 24).
I brought the camcorder into the local store (I was out of town for Christmas), and they gave me a number to call. The operator on the phone said to bring it into the store and the store once again referred me to the phone number. So I called them right there in the store and put the Circuit City employee on the phone with the 800- number rep. Finally, the store person agreed to take the camera, but would have to service me through this store. I was out-of-town, so I waited to get home to take care of this.
My local store gave me the same runaround with the phone number. I tried again and had the same response. The store finally agreed to take it and send it off for repairs.
About two weeks passed and I hadn’t heard anything, so I went to the store to inquire about the status of my camcorder. It had been returned, still broken, to the store (I have no idea when or if they were going to contact me).
It was not repaired because they couldn’t find the serial number (a sticker) on the product. The store said they couldn’t do anything about it and that I should call the 800- number again. I have not altered or removed the sticker. I figured it may have fallen off, but later discovered evidence that it never had one. More on that later.
The 800- numbers told me the same thing, they could do nothing without a serial number. This, I cannot understand, as I have a receipt showing I bought the camera and a protection plan. The relevance of a serial number I cannot comprehend.
Mind you, by now the 25th month expired.
I finally asked to speak to a manager in the store and found my first helpful person. He discovered the serial number was recorded in Circuit City’s computers at the time of my purchase and the number they recorded (as the serial number) is still on a sticker on the camera! Apparently, this is not actually the serial number, but it tells me the camera never had one (I still don’t think it should have to have one to be covered).
This manager said he would work with the national facility and get back to me in a couple days (spanning a weekend). After not hearing from him, I started stopping by the store almost daily, until I could finally get in touch with him. Again, he said he would have help for me soon.
By now, more than a month has passed. The warrany is expired, but at least my original claim was within the deadline. I still hold a broken camera and there is no end in sight. After dealing with nearly a dozen Circuit City representatives (in store and on phone), I think I finally found the ONLY ONE that actually wants to honor the store’s policy. Time will tell if this actually works out well.
I have a legitimate claim, and Circuit City, on a national level, has been giving me the runaround for over a month. Their “Advantage” Protection Plan seems to be a joke. The way this has been going, the blue and yellow store will be receiving my money for future purchases, not the red and gray one. There’s really nothing Circuit City could be doing to drive my business away any more than this horrible customer service and lack of honoring their own policy.
Follow up:
After about 10-15 visits to Circuit City, dozens of phone calls, and six weeks of time, the problem was successfully resolved!
The number on the camcorder was, in fact, the serial number (I still don’t think it should have to have been there when I had proof of purchase of the camcorder and the protection plan). The first time I brought it in, the store couldn’t find it and the service center apparently didn’t look for it.
The second time I sent it in with that serial number listed, it worked. I received a Circuit City gift card in the amount of my original purchase (on a separate note, I think it should have been a higher amount than the original purchase price, since it is for a replacement, and the original amount does not account for inflation in the past two years or the fact that the original was unusually discounted by being an open-box item and to replace it will cost more — I chose not to argue this point and walked away satisfied with my gift card).
Circuit City, you were a pain to deal with. There were at least a half a dozen times when your people sent me away (either in the store or on the phone) with the impression there was no hope. In the end, my persistence paid off and it worked out.