Groundhog Day: Another piece questioning the value of extended warranties


The same article keeps popping up every other week or so in one publication or another. Its headline either asks if extended warranties are worth the cost or screams they are not. It gives the same advice – “buy smart” – and generally reaches the same conclusion on whether you should buy a service contract – “It depends”. See here, then here, here, herehere, and here.  Why is somebody always picking on extended warranties?

Here are 5 reasons why I think extended warranties make an easy target.

Its’ easy; everybody’s doing it. If extended warranties and the companies that sell them are even half as terrible as they are often depicted why does anyone anywhere ever purchase one?

The bad old days. Industry image still sports the black-eye it got from the handful of scam artists and fly-by-night outfits that fleeced consumers in the early days.

Buy it hoping your won’t need to use it. An extended warranty or service contract operates a lot like insurance. If you need to make use of it, something you were hoping would not happen just did. So at best, we tend to see insurance and similar products as a type of necessary evil. At second best, they provide some relief in circumstances that we were really hoping to avoid but that would otherwise be a total disaster. And besides it’s hard to get all that excited about purchasing a product you hope you’ll never have to use.

Offensive language, a/k/a lawyer-speak, legalese, fine print. Enough said.

You don’t see the case for extended warranties being made enough. The industry is not responding. It is not telling its story. More importantly, it’s not telling the story of thousands (tens of thousands?) of consumer who derive great value and other benefits from having protected a significant purchase under a extended warranty, service contract, or extended warranty. The stories are there to be told, someone just needs to tell them.

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Filed under Customer Experience, PR & Branding, Service Contract, Warranty

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