Tis the season . . . to get ripped off if you are not careful.

I speak specifically of the extended warranties offered at pretty much every retailer for various electronic or other items.

These are RIP OFFS. Do NOT waste your money on them; the cashiers may say that it covers physical damage, including even being run over by a car, but that is a LIE!

Why are these such a waste of money?

First of all, the manufacturer’s warranty has to expire before you can even use the extended one.

Second, they only cover certain kinds of damage. For example, we bought a Nintendo DS for one of the kids a couple years ago at FYE. I got the extended warranty because the kids play rough with those. Recently, the hinge broke, causing the entire unit to fail (some wires got pulled out). I contacted the warranty people (Bankers Warranty group, I’m talking about you) since the manufacturer’s warranty had expired. They denied the claim because they only cover mechanical failures. They didn’t deem this to be mechanical – hinges are apparently not part of the mechanics of the device – go figure. I got my law firm involved and they decided to give another look at it. They just denied the claim again – even with pictures and my lawyer breathing down their neck. I’m waiting for a call back from the attorney to see what I can do next, but this post is a good place to start.

Now, looking at the reason for the denial, if there is a mechanical breakdown, one that would be covered, it would happen during the manufacturer’s part of the warranty. So, basically, you are paying these scams like Bankers Warranty Group to tell you to contact your manufacturer.

Third, the stores make A LOT of money on these things – commissions. So the cashiers – untrained salespeople – will tell you just about anything to get you to buy it. I am VERY disappointed in FYE – they should be ashamed of the lies they tell their cashiers. They are not alone though, I get the same rigmarole from WalMart, Target, Shopko, Best Buy, and so forth. Capitalism at its best worst!

Fourth, if you used a credit card to purchase the item, the credit card company may already be giving you an extended warranty.

Fifth, products are fairly reliable now. You have better odds in Vegas than in needing to use the extended part of the warranty.

Sixth, the cost of the warranty is usually close to or more than the cost for a repair in the first place. And, worse, about half of the cost of the extended warranty is the commission on the item! So, a huge percentage of that money for the warranty isn’t even going to cover eventual breakdowns – can you see why salespeople would lie and warranty groups (hello again Bankers Warranty Group – ) would defraud consumers?

Seventh, you’ll probably want an updated version of the item by the time you need it anyway, especially with electronics.

Now, to be fair, some people believe that there are some cases when extended warranties make sense (however, these people agree that purchasing extended warranties doesn’t usually make sense).

When it comes down to it, make sure you know what the fine print says is covered or not (regardless of what the cashier says) before plucking down your cash.

Tags: Shopping