The Pitfalls of Extended Warranties –

If you are among those who are tempted to buy extended warranties, you may want to read this.  I added my comment to those associated with the article. – J. David Lewis

There’s no mystery why retailers push extended warranties. In some cases, they make more profit selling the warranty than they do the actual gadget. The mystery is why consumers keep buying them.

Link to the WSJ Article

My comment was:  For many years, I have had this vision where I go through a very long purchase process.  The sales person has worked very hard to earn a juicy commission. Then, at the cash register, when the extended warranty is offered, I look very surprised and say “OH, if it is going to break, I don’t want it at all.” I just walk out the door without another word.

If it were not for having a son who has been required to offer warrantees, and hating that part of the job, I would probably go through my vision with some poor clerk. It has been my sense that many sales people are very uncomfortable with selling extended warranties. The businesses both require them to make the offer and pay substantial commissions. Still, more than one clerk has told me they do not like selling a “product” they consider a bad deal.

Recommended Posts