Welcome to the 62nd installment of The Wal-Mart Weekly, a column dedicated to bringing you insight, wit, facts, results, opinions, and just a bit of everything else when it comes to a very hot topic these days: Wal-Mart.

This week, I'll be examining the extended warranty practices practiced by Wal-Mart Stores, Inc. (NYSE: WMT). In the mood to see how consistent the retailer's extended warranties were, I visited no less than three Wal-Mart locations this week to determine what kind of policy existed in the one product category where extended warranties really count: consumer electronics.

Finding the right products

First of all, it's pretty well known that major retailers that carry consumer electronics have offered (and even pushed heavily) extended warranties for many popular products like stereo receivers and big-screen televisions for quite a long time now. The theory, I think, is this: many customers -- most of whom are afraid and even intimidated by many electronics items, wanted product assurances for these items. Big-screen televisions were also costly to repair, but the repair rate was low enough and the claims on having these items repaired was at a level to make selling extended warranties profitable for retailers. If you believe consumer electronics retailers were looking out for the customer in offering warranties, make no mistake: the profit was the motivator, not customer service.

In recent times, I've noticed that many retailers -- from general merchandise to video games to some "dollar store" retailers -- have been offering extended warranties for many items. In most cases, items above the $29.99 level seemed to have extended warranties, while items below that level didn't have extended warranties available. This makes sense: not many customers are going to be interested in paying a $4.99 or $9.99 extended warranty price on an item that only cost $30.

The "rebate" mindset strikes again

Similar to mail-in rebates offered on many items, I would be willing to place a large wager that the majority of those customers lured into a retailer wielding an ultra-low price (after rebate, of course) either never send in the rebate, or send it in and never follow up on the status of the rebate. Retailers recognize this, of course, and plan on a certain percentage of rebates never being claimed. Yet, retailers see the surge of foot traffic due to the advertising of these ultra-low prices and ancillary sales occur due to it. There is an entire retail psychology behind this strategy.

When it comes to extended retail warranties, the entry-level clerk in a given retailer generally has marching orders to offer an extended warranty to any qualifying purchase. This is not a strategy at just a few retailers, but a majority of them. If you've purchased an iPod, you'll know the routine well: before you can pull out the cash (we don't all use credit cards, right?), the clerk is whipping out a brochure and begins a diatribe on why you should "protect your investment." I'd whip up a defense against an iPod being called an "investment" (so would John Bogle), and I politely say "no thank you" and move forward. On occasion, a clerk may become a little more pushy and I'll firmly, again, say "no thank you."

The reason behind the above explanation is to set the stage for the "extended warranty" profit strategy I see happening in retail, and most recently at some local Wal-Mart Supercenters in my area. On three different occasions on buying the same product, I was offered a "protection plan" by the clerk for a $150 vehicle GPS system. Now, some may ask why I would buy three GPS systems, but remember: this is real-world research. The only way to see how a retailer is treating regular customers is to become on.

The experiments -- the best two out of three

So, this past week, I went on a mission to buy this same GPS system at three separate Wal-Mart locations. In order not to affect the results of the experiment, I went into the consumer electronics section and immediately asked for the clerk to unlock the security display case so I could purchase a specific GPS system. I wasn't there to ask questions and seem like an uninformed customer, but simply to purchase a product quickly and efficiently with a minimum of hassle.

As he rang up the purchase, and before I could swipe a debit card, the clerk was already extolling the virtues of buying a warranty to ensure my GPS would be covered "for years to come." I said, "no thanks, my bank already covers me by using my debit card." The clerk said, "no problem" and I was able to continue my purchase and be done with the first experiment. No muss, no fuss. The clerk was nice and polite, and didn't "push" a warranty on me other than offering it initially.

The second and third experiments were quite different -- so much that I'll only need to describe one of them. Upon entering the electronics section and asking for the specific GPS system, both clerks (almost identically, oddly), were already talking about how neat GPS systems are and how convenient they can be to travelers. One of the clerks was telling me about the harsh vehicle environment, with hot car interiors and stressed travelers. I'm not sure if this was a preamble to an extended warranty sales pitch or just personal observations, but it was entertaining nonetheless.

As in the first experiment, the Wal-Mart Associates I interacted with in experiments two and three were talking about the "need" to protect my new GPS "system" (hey, it's a single unit, right?) with a "protection plan." Eerily, both clerks dove into Round Two of the extended warranty sales pitch after I declined the offer the first time around. Trying to overcome my objection, one of the clerks stated "well sir, we have to ask . . . why did you decline this warranty today?" The second clerk came back after my initial rejection with "we have to ask why, and my guess is that your credit card already protects you." To me, a retailer needing to know why I didn't purchase an extended warranty on any product seems a stretch. Putting your customers on the spot draws a line in that relationship, yes? Of course, the easy answer is "I just don't want it." This is a line I used on both clerks, and it worked well. There really is no return to "I just don't want it".

I was able to leave both the second and third experiments with just two tries per clerk to get me to purchase an extended warranty. Not bad, but interesting nonetheless. The rather curious thing here was that both of these clerks referenced the idea that "we have to offer this" -- an insight into extended warranty management practices. Wal-Mart management must have issued an edict here: "you must offer and try at least a few times to sell extended warranties." What's rather strange is that the first sales clerk from the first transaction just went one time around the offer wagon with me. But still, all three clerks in all three experiments pushed the extended warranty. Ah, there's profit in them that products.

Join me here next week for another edition of The Wal-Mart Weekly. Until then, have a great Memorial Day and week.