Tuesday, May 08, 2007

This Week's CE Pro Article: Does Selling Warranties Make Sense For Your Business?

Here's a link to this week's editorial:

Are Service Contracts and Extended Warranties Worth the Price?

Disclaimer: In my retail career, as a saleman, I was always one of the top guns in every company for warranty sales, winning several awards. As a sales manager, I drove my people to excel at warranty sales, and always kept my store in the highest ranks for attachment percentage.

So for the consumer, are warranties worth it? It depends. Like anything else, you have to do your due dilligence. You need to actually read the warranty agreement, and don't be afraid to grill your salesman and make him squirm a little. If he's trustworthy, he'll be able to answer your questions about both the upside and the downside of the warranty program.

It also depends on the gear. To be honest, I have bought extended warranties on virtually every piece of electronics that I have ever owned. And for the small handful of products that have conked out beyond the original warranty, the cost of the extended warranties versus what the service bills would have been (and I am intimately familiar with what electronics cost to repair, believe me) still leave me ahead. In one case, the remote for my AV Reciever died. To replace it would have been $190. My five-year warranty cost me $39.

On the other hand, I've never bought a warranty for any of my cars. I typically upgrade/downgrade/unload cars within three years, so there's no real point.

Further disclaimer: selling warranties is a business that I am no longer in. The paragraphs above are my own experience selling and buying extended warranties. Your mileage may vary. Be a smart shopper and do your homework. Lastly, if you don't trust your salesperson or the retailer, then why the hell are you shopping there in the first place?

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