Retail electronics extended warranties such a hassle
Do you plunk down $150 for an "extended service plan" on that new PC? How about $400 for that new plasma TV? Hopefully, you'll never need to use it. I've had my share of extended warranty hassles many times, and in most cases, I don't buy them. Check your homeowner's insurance or renter's insurance -- is what you're buying already covered, or could it be with a simple change?
Extended warranties come with nefarious names like "service plans" and "protection plans." Throw in adjectives like "advantage" and "power," and that's why they sell to many people. What are these meant for? Pure profit, plain and simple. In fact, the retail spiffs for selling these warranties can be a nice addition to an employee's pocketbook. Are they worth it to consumers? After reading this lady's horror story on a 42" plasma TV she bought at Circuit City (NYSE: CC), it brought back a few horror stories of my own.
Sales pitches like "you can just come in and get another one off the shelf" have been standard fare from what I have seen, but nowhere in the service plan details does it state this. But, the employees who staff electronics stores routinely say this to customers, including me. In fact, when I was offered a $9 "performance plan" on a $30 digital camera accessory, I had to giggle a bit while politely declining. Have extended warranties gone mad? You bet they have, and with the business planning that makes them part of the revenue picture for many retailers, it looks like the madness will continue. Do you buy them?
Extended warranties come with nefarious names like "service plans" and "protection plans." Throw in adjectives like "advantage" and "power," and that's why they sell to many people. What are these meant for? Pure profit, plain and simple. In fact, the retail spiffs for selling these warranties can be a nice addition to an employee's pocketbook. Are they worth it to consumers? After reading this lady's horror story on a 42" plasma TV she bought at Circuit City (NYSE: CC), it brought back a few horror stories of my own.
Sales pitches like "you can just come in and get another one off the shelf" have been standard fare from what I have seen, but nowhere in the service plan details does it state this. But, the employees who staff electronics stores routinely say this to customers, including me. In fact, when I was offered a $9 "performance plan" on a $30 digital camera accessory, I had to giggle a bit while politely declining. Have extended warranties gone mad? You bet they have, and with the business planning that makes them part of the revenue picture for many retailers, it looks like the madness will continue. Do you buy them?











Reader Comments (Page 1 of 1)
8-28-2008 @ 6:59AM
rich said...
I have a G.E. extended warranty on my Sony tv, and the D board went out. GE sent a tv repair company to fix my tv and found the "D" board was bad. They took the board on July 11 and today its Aug 27 and they still have the board. They came last week and attempted to put the new (rebuilt board) board in and found it was defective, so they say it will be four to seven more weeks before I will have the tv fixed. It will be about 100 days the tv has been out of service. I have called GE numerous times attempting to have them help me get the tv fixed, and they have told me they are checking into it with their out source repairman, but it has done no good. They have now said they are sending them another letter to find out what is wrong, but I don't have any trust any longer because no one will do anything to get my tv fixed. I am at a loss for what i can do next. Does anyone have any ideas? In the mean time the warranty is on the clock without any tv to warranty.
7-13-2007 @ 11:03AM
carmine said...
not all extended warranties are bad. I purchased one for my son's Ipod from Best Buy. So far we've received 2 replacement Ipods without so much as a what's wrong with the old one. Maybe this is unique to Best Buy, but it was sure a good thing we purchased it.
7-13-2007 @ 11:54AM
Matthew Wurtzel said...
I agree with Carmine. Mobile electronics that are far more likely to break from wear and tear are perfect for these plans. My wife regularly breaks our cordless phone, and every six months I'm back at Best Buy replacing it.
7-13-2007 @ 12:17PM
mark said...
To All, I bought a Sony Extended laptop with accidental coverage warranty and I needed it fixed from dropping. They sent me the shipping info and packaging and paid for everything including freight. The costs retail to fix were well over 1600.00 and it cost me nothing and I got it back in 10 days.... They were awesome and I recommend if you can afford and are mobile or even if not as the flat screen alone was 700.00 . Sony was awesome!!!
9-17-2007 @ 1:39PM
Donna Stiles said...
Circuit City's Advantage ...
On February 26, 2006, the Stiles’ purchased a 50 Inch Plasma TV, model no. (LG 50PX1D) for $3,299.99, ticket #316402608104, at store #3164 in Salisbury, Maryland. They also purchased a five-year Advantage Service Protection Plan for $549.99, on the advice of the salesmen D. Abbott, along with a specific TV mount for $403.99. The Stiles’ purchased this plan in good faith and expected “hassle-free” certified service.
This purchase was made after extensive research on purchasing a quality plasma TV with the correct dimensions. Their home had been recently remodeled to include a fireplace and custom cabinetry that was specifically designed to the dimensions of the TV. The TV was installed on March 6, 2006.
On May 12th, 2006, two months later, the TV lost its picture quality and the screen showed large black spots. The Stiles’ were unable to view their TV. They called Circuit City’s Service Department on May 15th at 1-800-787-0750 and were given a call reference #5925646, confirmation #IHR605220412 and DUC #5927591. They were instructed to call Appliance Unlimited, Circuit City’s Authorized Service Provider at 1-800-448-3997 to set up a repair appointment. Jim, the technician (410-587-4945), called back several days later to set up an appointment. The Stiles’ were given ID #6106800.
Two weeks later, the technician arrived and quickly stated that the digital board had gone bad and that he needed to order a replacement. He told them that he could most likely get the part quickly. Two weeks passed and the Stiles’ called the service technician. He informed them that the part is on national back-order and that it could take up to two weeks to be received. The Stiles’ waited another two weeks and called the service technician again. The technician did not return their call. The Stiles’ called the Appliance Unlimited office number and talked to the secretary. She acknowledged that the service technician is having a hard time “finding” the part.
The Stiles’ decided to call LG, the TV manufacturer, and they were informed that LG had ample digital boards in stock. The Stiles’ then called Circuit City with the hopes of having them help resolve this matter and talked with Jesse, TV/Sales Manager. After several days of no reply from Circuit City, the Stiles’ call LG again and they were informed that Circuit City’s service provider, Appliance Unlimited, was UNAUTHORIZED to work on LG TV’s. They also stated that they would not sell Circuit City’s service provider the parts. A call was again placed to Jesse to discuss the situation to him. Since Jesse was providing no solutions, the Stiles’ asked to speak with the store manager, Lauren Palmer/CSA #1. She also provided no solution. The Stiles’ then called Circuit City’s corporate office several times and were placed on hold for extended periods of time.
The Stiles’ continued to call the corporate office and a few weeks later, a Ms. Margaret Donovan from Circuit City corporate called and stated she was working on the situation and gave the Stiles’ a contact ID #2205897. They did not hear from Circuit City corporate again. The Stiles’ then contacted the Better Business Bureau to issue a formal complaint and to ask for assistance. The BBB informed the Stiles’ that they would look into this matter. A few weeks later, the Stiles’ again spoke to the Circuit City store manager, and she stated that they were working on getting an authorized service provider.
After several months of misleading information and unwillingness by Circuit City to resolve this matter, the Stiles’ returned the TV to the Salisbury store on July 14, 2006.
In October 2006, the Stiles’ received notice from the BBB that Circuit City had issued an exchange for their original TV on July 31, 2006, ticket #14150118491, and exchange #H1775983. No amount was stated and the matter regarding the service protection plan was not addressed. In addition, the original model TV was no longer available and the exchange LG model was not similar in dimensions to their original TV. Circuit City’s store manager, Paul Renshaw/CSA #2, told the Stiles’ they could wait until new models arrived while the service issue was being resolved.
In November and December 2006, the Stiles’ spoke with Jesse, the TV manager on numerous occasions about the status of their TV exchange and service agreement and was told that they were working on it.
On February 1, 2007 the Stiles’ again call Circuit City and spoke with a new store manager, Tracy Sgon/CSA #3, and returned to the store on February 10th to consider a different brand of TV. They looked at a 46” Sony LCD TV (Model No. KDL46XBR2), with similar dimensions as their original TV and was priced at $3,609.99. It was not however, a 50 inch plasma TV. The Stiles’ were willing to pay the difference between the $3,299.99 original purchase price and this particular Sony TV but Tracy informed them that corporate had only authorized an exchange value of $2,899.00. The Stiles’ disputed this amount as the original TV only worked for two months. Tracy also informed the Stiles’ that she still had not been authorized to refund their protection plan fee, and stated that “the corporate office should not be selling service contracts when they know that we’re not certified.” Based on this information, the Stiles again did not go through with the exchange. The Stiles’ again called Circuit City Corporate and spoke with a Mr. Amos Forman who placed them on hold several times over a 1-2 hour period. Mr. Forman finally told the Stiles’ that there was nothing he could do for them.
On February 16, the Stiles’ contacted the Maryland Attorney General’s Office of Consumer Affairs to help resolve this issue. The Attorney General’s office wrote Circuit City a letter on March 5, regarding the Stiles’ complaint. A second letter was sent on March 22, as Circuit City still had not responded.
On April, 9th, a Mr. John Rekinburg, Circuit City’s new TV Manager, called to say that he had a different “lower-end” 46” Sony LCD model priced at $2,249.99 and asked if the Stiles were interested. Since Circuit City had still not addressed the service protection plan issue, and the quality and value of their TV offer was continuing to go down, they informed him that they were not interested. They also told him that they sent their complaint to the Maryland Attorney General’s Office and were taking steps to file in Small Claims Court. Two weeks later, another TV salesman from Circuit City called to say that the 46” TV that the Stiles ordered was in. The Stiles informed him that they did not order a TV.
On April 23, Circuit City sent a letter to the Attorney General’s office stating that only a $2,659.96 exchange credit was authorized and that they would now refund the Stiles for the $549.99 protection plan. They also stated that the Stiles’ should receive a check within the next 10-15 business days. As of June 5, the Stiles’ still have not received a check. On May 1, a certified letter was sent to Circuit City Stores, Inc. with no response.
After more than a year of trying to resolve this situation with different store managers, TV sales managers, customer service reps and making numerous telephone calls, sending emails and numerous letters without resolve, the Stiles’ feel victimized. The Stiles’ feel they were deceived by Circuit City’s unfair and deceptive business practices. Circuit City sold the Stiles’ a fraudulent service plan as their service provider was not authorized to work on LG TV’s. If the Stiles’ had not purchased the Circuit City protection plan, LG would have fixed or replaced their TV under their 2-year warranty. The Stiles’ feel it is unacceptable that they are now only being offered a $2,659.96 exchange value for a $3,299.95 TV that only worked two months. The TV did not perform in the manner expected.
As a Circuit City customer, the Stiles’ have done everything possible to resolve this issue in a patient, timely manner. Circuit City’s customer service policy prolonged this situation by not being honest and forthright from the start. Circuit City breached the contract and further complicated the situation by not offering a refund and a TV exchange back in May. In the interest of consumerism, the Stiles’ now expect Circuit City to refund the full amount of $3,299.95 for their original TV purchase, the $549.99 service protection plan refund, in addition to the custom design and the installation cost.
Circuit City has still not refunded the protection plan fee. Circuit City was served on August 24th. The Stiles have a court date scheduled for October 10th, 2007.