Stores like Best Buy like to take advantage of your natural fear that a piece of electronic equipment that you just spent a bunch of money on is going to break. And, let’s face it, it might — but that’s no reason to rely on an expensive extended warranty from the retailer.

Extended warranties are a huge source of profit for the store — and (according to our sister publication Consumer Reports) a big waste of money for consumers.

CR says:

When you take out an extended warranty, you’re essentially making a sucker’s bet. You’re gambling on a series of events happening at precisely the right time under precisely the right circumstances. These include:

* That a product will break exactly after the manufacturer’s warranty has expired and precisely when the extended warranty is in effect. Sure, it’s possible, but unlikely.
* That the cost of the repair will exceed the cost of the warranty. Surveys of Consumer Reports subscribers reveal that the costs are fairly close most of the time.
* That the product is likely to break in the first place. According to our data, most products are quite reliable and have not broken during the first three or four years of ownership.
* That you’re going to want to have the product fixed. Perhaps surprisingly, many readers surveyed said they didn’t bother seeking repairs because they desired a replacement product that had either new features, more power, greater flexibility, more advanced technology, or improved energy efficiency.

Now that that’s out of the way, here are some ways to protect yourself when making a major electronics purchase.

1) Pay with a major credit card that offers purchase protection and extended warranty protection.
You may not like credit cards. In fact, you may hate them. In that case, consider a charge card. For the small annual fee, a charge card will offer you many of the same warranty protections that Best Buy and it’s ilk are trying to sell you. If you eventually enter into a dispute with the store, it pays to have someone on your side. Do you think Best Buy is going to argue with itself on your behalf just because you bought a warranty from them?

2) Open the box before you leave the store and inspect the item. If you find old phone books or a severed head instead of your new laptop, it will be easier for everyone if the store knows that there’s no possibility that you were the scammer/decapitator. If the item is broken, your warranty might not cover the “accidental” damage. If you don’t inspect the item in the store, they will assume that you are the guilty party and no amount of arguing will convince them otherwise.

3) Check to make sure the serial number on the item matches the serial number on your receipt. Sometimes people switch broken items for new ones and return the box. If your receipt doesn’t match the serial number of the item, the store will assume that you are the one who switched it and the manufacturer may void your warranty. Again, do this before you leave the store so there can be no question about it.

If you are concerned about not having enough money to fix the item after the manufacturer’s warranty is expired — ask the store what they charge for an extended warranty and put that amount of money in your savings account. If the item never breaks, you’ve still got the money —plus interest. If it does break, you’ll have money for repairs.

For more in depth information about how to specifically protect yourself from being sold a “box full of crap,” (bathroom tiles instead of a hard drive, a disc that says “redneck shit” instead of the game you wanted, etc. click here.

(Photo:wiretap studios)

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