Making Price Drops Conditional On Extended Warranty Purchase Could Be Illegal

A few days ago we wrote about haggling at retail stores and how some sales people will cut you a deal if you get the extended warranty, since they earn commission off selling those. Well, reader Stephen writes:

In Michigan at least, it is illegal for a rep to base a price reduction on the purchase of an extended warranty. A few years ago, I was buying a returned Tivo from Best Buy, and the SA tried to tell me he’d give me a better price if I bought the plan. I stopped him right there, told him I knew that this was illegal and that he knew it too. Suddenly the lower prices was no longer conditional on the purchase of the extended service plan.

Something to remember next time you’re wrangling over that HDTV. Michigan’s statute, inside…

Here’s the relevant Michigan statute:

Act 331 of 1976, Section 445.903

Sec. 3. (1) Unfair, unconscionable, or deceptive methods, acts, or practices in the conduct of trade or commerce are unlawful and are defined as follows:

(w) Representing that a consumer will receive a rebate, discount, or other benefit as an inducement for entering into a transaction, if the benefit is contingent on an event to occur subsequent to the consummation of the transaction.

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