For the past 10 years, I have gone to retail stores, and have purchased electronic devices, or any other products costing more than $100. If you are anything like me, you probably asked yourself numerous times if the extended warranties that are advertised alongside those products are really worth the extra money. The answer will vary depending on what the warranties offer and how difficult they are to utilize.
Coming from a retail background myself, both as an employee, and as the son of a retail store owner, I can say that for a majority of the time, the retail establishments that you shop at, are counting on you to lose your paperwork, and therefore not being able to cash in on a warranty should you need it. The reason I say this is that if you actually examine the fine print, a lot of those extended warranties require a great deal of work on your part in order to make them work. Most employees of retail stores are not properly trained enough to be able to explain how to apply for and receive warranty coverage for the products that they sell.
You might be asking yourself, then, how can you make sure that you understand how the warranty that is being advertised works before you purchase it. The simplest way to find out about a particular warranty is to ask the employee to show you the pamphlet that explains how the warranty works. Make sure you bring a magnifying glass, since the text is usually so small that even if you have 20/20 vision, you’ll have trouble seeing it! If the salespeople are trained well enough, you should be able to ask them specific questions about the warranty after reading the pamphlet and actually receive a useful response from them.
When I sold warranties on electronics items, I would frequently ask customers what steps they followed to register and use the warranty for the items that they bought. You would be surprised at how willing the customers were to share this type of information. By asking them these questions, I accomplished two things: I established rapport with the customers, showing them that I cared enough about them to ask them about their experiences, and I also found out how the warranty process works, so that when I sold the same warranties to customers in the future, I could explain in detail what the process was for making a claim.
This brings me back to the core question of “are extended warranties worth it?” I would have to say that whether a warranty is worth it or not depends on the product that is being covered. Apple Computer sells an extended warranty called “AppleCare,” and while I personally have never had to use this warranty, everyone I have talked to had nothing but good things to say about their experiences with it. Online tech personality Chris Pirillo is one notable commenter (see what he says about AppleCare in the embedded video below). Another factor to consider is the price of the warranty versus the cost of the covered device. Make sure the extra money you are spending on the warranty covers any event that may arise during your use of the device. The worst thing you can do is to spend an additional $80 for an extended warranty only to find out that the warranty does not cover drops or other accidental damage caused. These types of accidents are the most common cause of damage to cell phones, causing people the most warranty troubles. If accidents are not covered, the customer will not benefit as much from an extended warranty, as they will have to pay for repairing or replacing their device themselves.
Retail employees are put under tremendous amounts of pressure by their supervisors to sell a specific number of extended warranties in a fixed amount of time. This is important to remember, since when store employees are faced with this much stress, they may try to sell you an extended warranty that you cannot afford, or worse that may not cover the device that you are buying. Kmart, in particular, has been guilty of this for years. I know this because I worked at Kmart, and I was put under a lot of stress as I was making sales. However, I did not sell these “assurance plans” to my customers if they did not actually need the extra coverage.
So you might now consider whether the warranty that is advertised for a product is actually worth it. Generally speaking, if you are buying a device that costs less than $100, do not even think about getting an extended warranty for it. On the other hand, if a device is extremely expensive, being anywhere from $700 to more than $2,000, examine the advertised warranty carefully to ensure that it covers any type of damage that may be caused by your use of the product. As a rule of thumb, if a device is expensive, and the extended warranty looks like it is worth the extra cost, I will go ahead and purchase it, if for no other reason, than to get peace of mind.
I think Chris Pirillo does a very good job in explaining extended warranties and how they work in the video that he recently recorded. While the video does not go into as much detail as this blog post does, it will give you a general overview of the way that extended warranties work, and will explain a little bit about how Apple Computer’s extended warranty, AppleCare, protects the investment that customers make in Apple’s products, and why it is worth buying.
Comments are welcome. Please keep them constructive or at the very least non offensive.
Tags: AppleCare, assurance plan, Chris Pirillo, extended warranties, Kmart, warranty
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