[SCAM] Gadget Insurance and Extended Warranties - Comments Page 1

Category: Finance , Gadgets



All Comments on: "[SCAM] Gadget Insurance and Extended Warranties"

Comment Page: 1 |  2 

Posted by:

Ws
23 Mar 2017

Contracts for refrigerators, washers, etc also a scam for about 10% of selling price for 3 years beyond warranty $50 deductible?

Posted by:

Ron Miller
23 Mar 2017

When I bought my son an Android tablet from Walmart in 2014 or 2015 for $89.99, I purchased SquareTrade Warranty Service at the same time as it was offered to me (around $23). It was a one-time charge, had no deductable, took effect on the date of purchase and extended the original warranty by 2 years.

When my son eventually dropped it and cracked the screen, I contacted SquareTrade and they sent a replacement tablet that did not match the resolution of the original, and did not have a camera on both front and back as did the original. I called SquareTrade and spoke with someone, explained the issue and they agreed that the replacement was not what it should have been.

They credited an e-trade card the full purchase price of the original tablet which I used to purchase a comparable tablet for my son, and they said I could keep the replacement tablet they had sent me.

Usually, I would agree that extended warranties are something to avoid, but in this case I guess I got lucky and it seemed a good idea at the time.

Now, if I was buying from EBay and the seller offered extended warranty service of some kind, I completely agree with you to beware and stay away from it.

In my case, the seller was Walmart, which I felt would not allow a scamming company to do business with them.

YMMV

Posted by:

RandiO
23 Mar 2017

Thank you, Mr. Rankin,
Another thorough post, as usual!
I witnessed this whole extended warranty procedure (scam) for Apple products, when a friend's Apple iMAC (All-In-One) desktop Retina display showed excessive dead pixels (after 13 months. First thing is to call the nearby Apple store to make an appointment to bring it. A day later, we took the AIO to the store and had to wait over 45minutes (of delay) to get an 'Apple genius' to provide assistance. After another 90 minute 'inspection' time, we were advised that the display was indeed at fault [duh!]. The genius then advised us that they would have to keep the iMac for about a WEEK. Instead of losing my cool with this procedure and their 'customer service', I walked out of the store and waited another 25 minutes for them to do the paperwork. In the meantime, my friend was stranded w/o his iMac for 6 days.
This may have been an isolated case, although I noticed that there was a line of people waiting at the 'genius bar' for service.
Arghh!

Posted by:

GuitarRebel
23 Mar 2017

I wouldn't recommend Square Trade to a dog wanting to warranty his leash from breakage.
I bought 3 extended warranties from them and when my phone camera I purchased refurbished on Ebay quit working after 6 months, I filed a warranty claim and sent it in for repair or replacement. They denied the claim stating there was old water damage in the phone.
So, why offer warranties on things you have no intention of repairing if something goes wrong?
I cancelled my other warranties and reported them to scam.com.
Don't be like me. Read the fine print, people.

Posted by:

PeterMax
23 Mar 2017

I agree with your assessment in principle, Bob. However, I've found AppleCare on my iPhone to have been a good purchase and has paid for itself on 2 (models of) my phones. It's a one time charge and offers my clutsy self some major peace of mind.

Posted by:

Charley
23 Mar 2017

My "home computer" endorsement that covers smart phones with a $50 deductible is only $18/year now. That is $18 total for $5000 coverage on all my computers, smart phones, etc., (i.e. not a charge for each device).

From my insurance company:
Smart phones are defined as phone devices having the ability to manage and transmit data including accessing the internet and sending/receiving emails like a PC. As long as your phone falls into that category of device it is considered a computer and is covered under the Home Computer Endorsement. Other covered devices include iPads, iPhones, netbooks, notebooks, Blackberry’s, and the iPod Touch amongst others.

This endorsement is an all peril endorsement, however it is subject to the exclusions listed. Things like wear and tear and intentional loss are not covered. Damage from dropping the device may also be excluded if the action that caused the device to drop is determined to be negligent. An example of this would be if you intentionally threw the device at someone causing it to fall and break.

Posted by:

Charley
23 Mar 2017

I should mention that my "home computer" endorsement is for theft, loss, damage from falls, etc. It is not coverage to fix your device if it stopped working. In other words, it is not an extended warranty. But that was fine with me. I figured at the price of expensive smart phones, I could easily drop it, lose it, etc. and this was cheap insurance.

Posted by:

RandiO
23 Mar 2017

@GuitarRebel,
Most dogs would pay extra to have their leash break on the first day of purchase, so that they could run around free! ;)

Posted by:

Marcia
23 Mar 2017

I bought a brand new Samsung Note 5($700) and a 2 year warranty plan ($109) for it through Square Trade. After dropping my phone in the toilet...the bag of rice didn't work, I contacted Square Trade. There is a $99 deductible and it was replaced with a refurbished phone. BUT because the replacement one is certified I get to use the year that is left on my square trade plan with no additional cost. I had my replacement in two days and its working as advertised. Square Trade was easy to deal with and user friendly. NOTE: In the first year Square trade covers items that the mfg. warranty doesn't cover. I am happy with the customer service I received from Square Trade

Posted by:

Dave S
23 Mar 2017

My brother has bought Square Trade warranties for his iPads and it has come in handy twice. So definitely got his money back on it.

For appliances...so many (most) have so many electronics that can often and easily get fried with a power surge from a thunderstorm, (and I've had experience with this). The warranties have come in handy several times and saved me **quite a bit** of money overall in repair costs.

Posted by:

Cameron
23 Mar 2017

I'll never forget years ago Consumer Reports put it this way: If you add up all the extended warranties you turn down over the years, they add up to much more than the purchase price of the one or two items that may have been covered by them, even the high ticket ones.

Posted by:

Renaud Olgiati
23 Mar 2017

Simple Basic Principle For Insurance:

Only buy insurance cover against the losses you could not afford to pay yourself.

Posted by:

Heather
23 Mar 2017

Well I have had some warranty protection for mobile phones, back in the days pre-smartphones. I dropped my circa 2008 Samsung display phone and no display. This was a type of flip phone with a full qwerty keyboard that you used when you flipped the phone horizontally, permitting one to text quickly - or you could keep it closed and see a smaller display and text using the numeric keyboard. The extended warranty through Verizon replaced it out of warranty with the same equipment. I think my cost per month then was less than $3.

Now the cost to "cover" a smartphone is nearly 4x that, per month. And I'm in a different work situation and the jeopardy to the phone is not nearly what it was. So I don't buy it.

I also purchased a one-time fee extended warranty on an LG LCD television, back when they'd first become widely available -- a 37" screen TV was nearly $800. And we know what they cost now...the device needed some repair and thankfully even though the major chain that I bought it from had gone out of business, since the warranty was from a third party, it was honored, and after 2 visits and a part that cost more than the warranty did, it was fixed and STILL works well.

For a while back in the 1990s, my credit card company offered an annual "warranty advantage" program giving us about 20% of the cost of repairs of appliances in the house. I think it was something like $125. I had a very old (circa 1978) fridge, a circa 1980 washer dryer, and some other appliances -- this service more than paid for itself -- actually probably doubled my money. All I had to do was to call them and tell them I had a problem appliance and since I lived in a rural area, they permitted me to select my own repair service. So I got a new icemaker and compressor, new washing machine motor (which was the result of a bad repair job earlier -- the maytag guy wasn't sleeping at my house), and I cannot remember what else. I believe that some credit card companies still have such a program -- I know Amex did for a while if you bought the appliance using the Amex card.

Posted by:

Daniel Wiener
23 Mar 2017

I certainly agree that extended warranties from vendors are a scam. (I wish I could convince my sister that the warranties she has from Sprint on all her family's phones are a waste of money.) However, under certain circumstances I've been willing to buy extended protection plans from Square Trade. Similar to Ron Miller, we bought a one-time $99.99 Square Trade policy with no deductible through Costco when my daughter got a laptop computer in 2014. Recently its battery crapped out, about two months before the end of the 3-year policy. Square Trade authorized its repair by any legitimate repair shop, although they recommended a nearby one which we used. It was fixed, we paid the repair shop and emailed the invoice to Square Trade, and they immediately sent us a reimbursement check. The whole process was totally painless and far exceeded my expectations. So Square Trade gets a big plus check mark from me.

My daughter is also very hard on her cell phones, so when she had to replace a damaged Galaxy S6 with a new Galaxy S7 we decided to buy a $149 3-year Square Trade protection plan for it. Interestingly, when trying to decide how many years to buy, I was told that a 2-year plan would be $119. Clearly they are discounting the longer plans to incentivize people to buy them, which is common practice. But I was also told that I could cancel at any time and get a pro-rata refund. So after 2 years I could cancel if I wanted and get $49 (i.e., one-third) back, which would effectively make the 2 years only cost $100 instead of $119. When I pointed this out to the Square Deal sales rep I was talking to, his reaction was "Yes!! I have such a hard time conveying that to customers, and it's such a pleasure to have you figure that out for yourself!".

Posted by:

Joe Gill
23 Mar 2017

For the most part, I agree. For most items, NO extended warranty. My exceptions are:
A) If you are purchasing something which is 'bleeding edge' technology, you are a guinea pig. Guinea pigs need insurance!
B) If you yourself are a 'klutz', and drop / smash things, or are hard on devices (as in toss laptop on the couch and it falls to the floor), I recommend the insurance.
C) If your argument is..My homeowners (or renters) will cover it, BEWARE. One small claim and you could be paying FAR MORE in insurance.

Posted by:

Robert A.
23 Mar 2017

One of the most ridiculous attempts to sell an extended warranty is at Best Buy, where the cashier asks, at check-out, if you wish to buy, for about $5.00, a "protection plan" for a $5.00 or $10.00 Blu-ray or DVD disc. Come on! Seriously?

Either the disc plays right out of the case, or it doesn't. And if it doesn't, you return it and get a replacement within the normal 15 or 30 day exchange period. And if it does play, it should be good for at least 100 plays, or longer, than most persons will likely play the disc in their lifetime. You're likely to want to upgrade from a DVD to a Blu-ray or 4K UHD Blu-ray disc, even if the original disc were to somehow fail.

For most small electronic items such as thumb drives, headphones, keyboards and cheap disc players, the retailer is likely counting on the buyer losing the cash register sales receipt that has the proof of purchase of the extended warranty/service plan, or forgetting that they actually bought extra protection, after several months, if not weeks, and then will end up buying a new unit, out-of-pocket, to replace the defective product.

Posted by:

Robert A.
23 Mar 2017

With the ever changing landscape of technology, products and features that are state-of-the-art today will drop down to mid or even lower tier desirability, very quickly. Ten megapixel digital cameras, which were considered top-of-the-line five to ten years ago are now considered opening price point units, and the most current units are likely boasting 25 or more megapixels. A typical 55 inch top line 1080p HDTV five years ago may have sold for $1200 to $1500, but a comparable unit, size and features wise, if one can be found anymore, will likely go for about $250 to maybe $400, these days.

Most higher quality electronics are inherently reliable, right out of the box, and, if they do fail, it will likely be dead-on-arrival, upon unboxing or die, generally within the first 90 days of constant use. Should that happen, it may be easier to just return the defective unit within the retailer's refund/exchange period.

Just be sure to save all the original packaging material - box, Styrofoam packing, cables, accessories and any included paperwork that came inside the box as shipped from the factory, or the retailer may charge a 15-25% "restocking fee" to cover such missing items.

A typical manufacturer's warranty is generally for 12 months for parts, and sometimes for repair labor, although repair labor coverage may be limited for only 90 days from the sales date. A very few high dollar premium brands may offer two, three or even five years of factory coverage, but that is usually very rare, and, realistically, reflected in the higher purchase price.

Costco offers an additional year of warranty coverage on some of the highest end TVs and electronics it sells, effectively doubling the manufacturer's warranty to two years. Costco also offers a two year Square Trade extended warranty, at extra cost, for about $100 for a typical 55-60 inch TV selling for over $1000.

Breakage is usually not a factor in non-portable electronic devices, such as TVs, or major household appliances. But, in the case of portable devices, such as laptop computers, tablets and smartphones, there is that possibility, and an extended warranty may be desirable, depending on terms and cost.

The buyer should always read all the fine print on the extended warranty policy sheet and try to understand what is and what is not covered, as well as the limitations on repair and/or replacement coverage for failed or damaged unit. An online search of a particular manufacturer, retailer or third party warranty provider's warranty claims issues should provide many answers to potential buyers as to how those companies deal with claims.

It may be helpful to know if an extended warranty can either be purchased within a certain time frame after the original item purchase, or be refunded in say, five or 10 days, in the case of buyer's remorse. Some states may have consumer laws that allow such a contract.

Posted by:

david sparkman
23 Mar 2017

Warranties are sometimes useful in the buying decision for cars. The reason is, as you mentioned, that they do know their actual costs. So if two cars are about equal in cost/value, the one with the less expensive insurance price is probably better made and will have fewer and less expensive repairs over the warranty period. So the manufacturer, knowing this, prices his warranty lower.
On phone warranties, the deductible that you pay is often the wholesale price of the phone. They lose nothing by giving you a new phone at cost.And they keep your monthly payments as their profit.It is a total scam.

Posted by:

NB
23 Mar 2017

Bad news: AT&T "forgot" to mention the deductible on their protection insurance when I bought my most recent iPhone.
Good news: when I found out, I was able to cancel the plan immediately - not locked in.

Posted by:

STS51
24 Mar 2017

Costco has great warranties. They include a 2 year warranty with most electronics and extend that to 4 years if you use the Costco Visa card.

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