Appliance, electronic and tool retailers are often very well-trained in the art of up-selling protection plans that extend warranties and claim to provide bonus services to help protect your purchase. Howard Schwartz of the Better Business Bureau (BBB) says when you're asked to pay extra for an extended service contract, ask yourself: Is the extra cost worth it?
The answer, according to the BBB, is not so simple.
The Federal Trade Commission (FTC) advises consumers to understand exactly what they'll get for their money if they buy extended coverage. The FTC says rather than extending a manufacturer's product warranty, most product protection plans are service contracts, which are not the same as the manufacturer's warranty, and they typically contain wide-ranging restrictions and exclusions.
Some consumers feel a service contract is worth the peace of mind once a manufacturer's warranty expires, the BBB states. Others don't see the point in paying extra money to buy a five year-long protection service for a moderately-priced item, such as a $65 printer.
Alternatives to service contracts include insurance policies for merchandise that is easily lost, stolen or broken, such as a smartphone. Some credit cards extend manufacturers' original warranties as a perk, according to the BBB.
Unfortunately, most cashiers do not have the information you need about the extended protection policies they sell. The BBB encourages you to take home a copy of the paperwork and understand the terms, conditions, exclusions and limitations of the extra coverage:
• Weigh the benefits. What is the expected average lifespan of the merchandise?
• How reliable is the type of product?
• Understand the terms and conditions. If you buy extra protection, make certain you know what is covered and what is not, such as labor, parts and service calls.
• Get details about customer service. How long do you have to wait for repairs? Do you have to pay for shipping? Is the repair service contracted out to a local service?
The BBB recommends researching retailers before you buy at BBB.org.
Published with permission from RISMedia.