Sports Authority Is Selling An Extended Warranty For Shoes
Sports Authority is pushing a new "Extended Coverage Plan" for footwear that runs for one year after Sports Authority's 30-day warranty expires. The extended warranty, which costs between $4.99 and $15.99, supposedly even covers normal wear and tear. So how is this profitable?
Sports Authority associates tell us that most people simply forget they have the extended warranty, which we find hard to believe. When we asked what would happen if we requested a new pair after cutting the tongues off our shoes for an art project, we were told that "managers have been very lenient."
Sports Authority associate Taylor Smith writes on his blog that the warranties are part of a new corporate effort to upsell extras:
i sell shoes and we have this "Operation Big Foot" thing that just started in February 2009... we are supposed to basically ANNOY the customer by trying to persuade them to purchase an "ECP" aka Extended Coverage Plan, Insoles, shoe cleaner, sneaker balls (deodorizer), heart rate monitors watches, socks and any other product that we offer.It gets so redundant throughout the day but the up side is we get a little money for each thing we sell. Like if i were to sell you an insole that costs $19.99-29.99 each i would get $1. If i sell you an ECP and your shoes cost $79.99 your ECP would cost $9.99 and i would get $.50 but if your shoes cost over $100.01 then the ECP would cost $15.99, and i would get a buck!
The extended warranty is administered by the National Electronics Warranty Corporation, which has several complaints against it on RipOffReport.
We distrust most extended warranties. A warranty on shoes that including wear and tear seems to good to be true, which means that it probably is.
Consumer Portal [National Electronics Warranty Corporation]
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Comments:
Sports Authority has been not exactly a star in retailing for a long time. The store near me sits with it's back to a highway (smart design!) and barely ever has more than 5 car in the parking lot.
I see they are trying to pad their bank book a little by tricking customers. Never wise. Any sales person that "ANNOYS" me gets no sale.
I appreciate this story, I will avoid their store now!
The last time I went to buy some shoes, I went to the running store. After being ignored for 10 minutes, I walked over the the Sports Authority that is in the same shopping center and got some service right away.
I didn't get hounded for an extended warranty on my shoes. I did however receive some really good service from a sales person on some good running shoes. He encouraged some insoles (which really helped out) but he didn't come on too strong.
I think some Sports Authority stores are hit and miss service wise though. I think it depends on the sales culture that management has. The stores in my area used to be Gart Brothers locations, so I think that some of the old Gart Brothers sales standards and procedures are still evident even in some of the new stores that never had Gart Brothers on the building (district management, maybe?)
WTF? What will the guy from the wall street journal say?
As stated in the article (and as a triathlete, I can attest to)
Four months for a running shoe was ancient, they said. Some customers bought shoes every month.
LL Bean has a lifetime warranty on things they sell. My sister bought me a pair of shoes that I wore every day for well over a year and basically beat the hell out of. When it finally started falling apart, I thought about just sending them in for a new pair, but my sister balked. Her feeling was the shoes had been great quality and the company had more than fulfilled their obligation. There was no reason to take advantage of the warranty and it was better to just buy another pair, supporting them.
@PLATTWORX: Mine has what I like to call K-Mart Syndrome, albeit a mild case. When I go in, it seems dirty, dim, dated, and generally makes me feel like I walked into 1996. It gives me that feeling that something isn't quite right, like you get in a house that just got burglarized. The place feels like it got robbed. The only thing setting it apart from K-Mart is the lack of the tight, narrow, almost lightless aisles and the creepily abandoned Little Cesar's Pizza that makes you expect a rape/murder behind the dusty table stacks.
@Gilbert: I am too, though if they were to institute a penalty for every customer complaint from being harassed about such things then it might be fair. Makes them know when to shut up when you say no and maybe actually give good suggestions instead of just trying to upsell for the sake of upselling.
@MonkeyMonk: Try playing real tennis at a good level of competition.
I used to wear normal shoes it in a few weeks. In a month, they were unplayable by any standard. When I started buying REAL tennis shoes.... they started lasting 1-2 months. With an additional few bonus weeks until being unplayable. It's common in tennis that shoes come with sole durability guarantees. And most reputable shoes warranty the shoe from other types of screw ups.
So you can spend anywhere from $50 up to $110 (for the premium top of the line models) for a shoe that will last you a handful of months guaranteed.
They're obviously still making money. This is hardly I new business model......
Wow, those incentives are pretty crappy. You get 50¢ to a buck? You'd have to sell 100 of those per day to make it worth your self-respect, I'd think.
And what's the retail margin on sports shoes? All of the non-blingy shoes cost $100 bucks and up. Granted, the real margins go to the manufacturer, but really, what's the retail margin?
Next question, obviously, what's the manufacturer's margin? And what would it be without all of the advertising?
@henwy: Yes, the idea is that if the shoes wear out and you feel that they have served you well, then be happy. If, however, you feel that the shoes shouldn't have worn out and are unhappy with that, then LL Bean will want you to return them. They don't want you to have anything from them that you are not happy with. I haven't had to use that on items from them, but I have with Lands End - took back some jeans that started fraying after a couple months (yes, I know some people pay extra for that!).
Back when I was working for a big box electronics store and the warranty boom began, that's how they treated the terms at first also. You could exchange it for any reason as long as you had the warranty. Then as people got used to the terms, the policies changed and you couldn't get them exchange it for anything!
Salesmen were specifically told to avoid telling the customer that there were more restrictions.
@DogiiKurugaa: I used to work at a store that expected to upsell like crazy WITHOUT incentives. Basically their idea was "upsell like you're supposed to or find another job."
I would have preferred a commission.
@rpm773: Yeah but if you happen to need something really quick there's little choice. You can't always wait a day or two for something to ship.
@henrygates: Yeah I've had that before. My manager told me clearly that the warranty does not cover certain things but then I saw her sell one to a customer telling them that it "covered anything that could happen".
Sports Authority is usually hit or miss for me as well, I did buy a pair of sunglasses for 70 bucks and bought the warranty for 10. the glasses got scratched and I brought them back. They called the warranty place for me while I waited, gave me a new pair of glasses under the warranty plan no questions asked and let me buy the warranty again on the new glasses for 10 bucks. I am not big into warranties, esecially on things I often lose but this time it has worked out. I am in Iraq and the new pair is getting scratched up so I will be returning these when i get back.
This makes total sense actually. Most people really *do* forget that they have extended warranties, or warranties at all, or they decide it's too much hassle to exercise their warranty rights. In a lot of cases they're right - it really is too much hassle - but with 3rd-party-administered extended warranties, the economics changes. 99% of the time, upsell warranties are pure profit for the retailer. It's only 1% of the time that they meet a guy like me, who is GUARANTEED to know and exercise his warranty rights! :-)
I noticed this yesterday and it wasn't the sports authority. I went to Finish Line and my wife went to Lady Foot Locker, both stores were much pushier than before about accessories. both had buy one get one socks that they insist you try on, both forced you to try their insoles (which made things worse), both shoved paperwork in your face for reward cards.
I hadn't been to the mall in a few months, but all the stores we went to seemed like this, very pushy, we got offered a credit card a baby gap...this was normal, but when we refused the sales person went on for another 5 minutes about how much money we will be saving on a daily, monthly and yearly basis based on how much we just spent.
@Quatre707: Mine don't fall apart; I just wear them out after six months. Unfortunately, I buy four pair at a time and more when they're on sale. Right now I have about five years worth of shoes patiently waiting for me.
I work for a very high end shoe store. Most athletic shoes are designed to wear out in about 6 months. The reason for this is most sneaker style shoes are made with Ethylene Vinyl Acetate, which is good because it's a material that provides superior shock absorbition. But under normal wear and tear by a reasonably active person there will be about 6 months of use before either the rubber at the heel wears down, or the foam suffers so much compression that it doesn't provide enough shock absobtion anymore.
I predict one of two things. One, SA will make it incredibly hard to return products, ie. normal wear and tear is fine, but must have original box and receipt. Or two and more likely, this will be an incredibly costly endevour and will be short lived.
The place wear I work, small but very high end shoe store will laugh their asses off about this. No way you can run a profitable shoe store or department with stuff like this. You'd perpetually be running out of shoes and never turning more than the 10 dollar warranty fee.
@thrashanddestroy: Why would anyone buy shoes online without trying them on first? Unless you're just buying a model that you already own so you can buy the same model and the same size. I try on 10-15 pairs of running shoes before I pick the one for me. I'm certainly not going to do that online.
OMG! Con Seannery!: Why would you expect a murder in the little caesar's, you can see in that! The place to expect the rape/murder is the narrow dimly lit aisles. They provide that sense of the alley that the criminal element feels so at home in.
@balthisar: Shoes have a pretty low margin basically enough to cover the cost of ordering a replacement pair of shoes plus about $10 - $20 of "profit" to pay bills, employees, upkeep the store, and remainder is pure profit. Most cities have several shoe stores, shoe companies sell to many different retailers, so it's not like a company can really claim a stake in a unique position given that nearly all athletic shoe stores will offer similar experiences and price points. Now dress shoes which are made in more limited runs and hence don't ship out to as many distributors are able to keep a much better profit margin.
I need to do that with my skates. You can buy these little stuffed animals full of peppermint or something to stick in them, but they're expensive.
I'm going to try it with the suitcase I carry them in, too.
As I recall, Nordstroms used to have a very liberal return policy for shoes. Not sure if they still do, but there were many stories of people bringing back well worn shoes years after purchase for either a full refund or store credit. I don't even thing a receipt was required.
They seemed to get a lot of good rep from the policy, and it didn't cost anything above the price of the shoes.
I used to sell NEW warranties at a major department store, for jewelry, and we never had a warranty repair get denied by the warranty administrator. I always recommended it because it was worth a few extra bucks to know that your jewelry, if it became damaged or worn, would be repaired or replaced for free. My "attach rate" for this was over 30%.
The "worst" thing that ever happened to our customers would be that the warranty company would "Buy out" the item -- meaning the customer gets back the full purchase price they paid for the piece. This sometimes happened when the customer got a really good deal on a piece and the damage was severe. On the other hand, sometimes folks who didn't buy the care plan would return after 90 days and find out that repairs could be quite costly.
So I don't think NEW is evil or a ripoff.
If I were buying sneakers, I don't think I'd bother with it, but that's just me. It might work out well for people who are hard on shoes.
I've worked at Sports Authority for about 5 years now in the footwear department and i even though i hate to pressure customers to buy these extended coverages, overall it's a good deal, I sometimes tell my customers straight up that if you wanted to you could cut the eyelets of the shoes when you want a new pair and they will send you a check. Even if the company that backs the warranty refuses to send you a check all you need to do is bring them into the store and a Manager will ALWAYS allow you to exchange them if you bought the coverage plan.
So in these hard economic times, it's always nice to have a new pair of shoes every year for only 5 dollars.
@Quatre707: SO it is you returning those shoes. We have people returning shoes that just "fall apart". They are shoes that are abused. If you let your kids run through mud they are going to fall apart. An sadly we will take any thing back no matter the condition with receipt.
@johnfrombrooklyn: Well, I typically know the exact size I wear in several different brands. On the off chance that I don't own a pair of said brand I'm looking to purchase online, I just hit up a brick and mortar and try those suckers on.
Easy peasy.
















Wait-many athletic shoes last less than a year. Something about this doesn't make sense, and I'm having trouble finding their full terms and conditions.