Watch out for this Christmas gift shopping rip-off!
Beware this rip-off when doing your Christmas gift shopping!
Shops and online stores are keen to sell you an extended warranty when you get to the till. But are these insurance policies worth buying?
I bought a new digital camera the other day. £79.99 for a 12 Megapixel camera, down from £189.99. What a bargain! However when I got to the till in Currys the hard sell began. I was offered an extended warranty for £39 for three years cover or £59 for five years cover.
"No thanks," I said. And here's why.
An extended warranty provides you with a certain amount of time - usually three to five years - during which the good working order of an appliance remains the retailer's responsibility. Sometimes the cover includes accidental damage and theft too. All appliances come with a statutory 12 months cover and the extension kicks in after that.
But experts generally say that extended warranties are a waste of money and with product reliability improving people are less likely to need cover. My new camera is made by Kodak - so a pretty well known and reliable brand.
Traditionally retailers have sold extended warranties alongside big ticket electrical items such as televisions, ipods, washing machines and fridges. However some retailers are also trying to sell the policies alongside low cost electrical items such as hairdryers and Christmas tree lights too.
Statutory rights
Shoppers have statutory rights under the Sale of Goods Act which means that in some cases, stores should repair faulty goods even after 12 months when extended warranty cover would start.
By law, if the appliance breaks down within a reasonable period of time, the retailer is obliged to put the problem right by repairing or replacing the product. But what counts as "reasonable" is open to debate and may be something retailers will quibble over if you approach them with a complaint.
But when I bought my camera I was happy to take the risk that a) it would work for several years without problem and b) If this wasn't the case I'd be successfully be able to argue my case with Currys for a replacement.
Alternative cover
As well as breakdowns, "accidental damage" is a key selling point of extended warranties but many people will have this cover on their home insurance already - and there's no point in having double the cover you need. Alternatively, you might also be covered on your credit card when you buy an electrical item. Check your credit card's terms and conditions or give your provider a ring.
If you don't have an extended warranty on your home insurance or credit card and decide you'd like some kind of additional or extended cover for electrical items you don't have to buy it at the point of sale - you'll get cheaper and better insurance by shopping around.
A number of firms such as Warranty Direct and Domestic & General sell extended warranties on everyday household goods, from toasters to computers. They also sell warranties that cover a number of appliances.
For example, Warranty Direct can cover two items for £10 a month. It also offers various packages for kitchen appliances, home entertainment or for every electrical item in your house. How much this costs depends on the items you want to insure, how old they are and how much they cost. You can get a quote at warrantydirect.co.uk and using promotional code RAOX108 will get you a 10% discount.
This is a classic article which has been recently updated.
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Have to disagree with MK22 here. In my experience, Richer Sounds are AWFUL! I've never had such a shocking time with a retailer before or since. They ripped me off by £20 and when I wrote to complain, they wrote back a horrible refusal letter, including name-calling, but they didn't write back to me: they wrote to the chief executive of the FTSE250 company I was working for!! To this day, I still have no idea how a retailer thinks it can get involved between me and my employer. Richer Sounds are a horrible company.
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[url=http://www.lovemoney.com/profile/profilehandler.aspx?uid=14975]Crissa[/url] I believe Currys would offer a warranty that would suit your needs, the price is dependant on the price of the laptop but can be purchased on a PAYG or a Term basis, there are two levels of service, [b]WhateverHappens Club[/b], Offers breakdown cover including my mishaps (drop breakage etc), a collection from wherever is convenient home,office or currys store, a guaranteed repair time of 28 Days and a product replacement voucher should your laptop not be repaired within the time frame or for any other reason. The voucher has no excess, nor does the repair, there is no limit to the number of claims and any replacement voucher issued will cover the cost of replacing the laptop with at least one of equivalent specification or better where not available. Also a 5% discount off all techguys services. Prices for this start at around £4.99 a month and go up to around £12.99 a month term prices vary and are available in store. Not good enough theres one better! [b]WhateverHappens Premier Club[/b] Offers all of the above but in addition: [b]10 Day MAXIMUM[/b] repair time! Loan Laptop while yours is being repaired 20% Discount off all techguys services Obviously this is priced at a little more but if you NEED your laptop like me then its a great service. Again info in the the store on this or on the website. HTH
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[b][url=http://www.lovemoney.com/profile/profilehandler.aspx?uid=29844]mistyeyed[/url][/b] You obviously haven't read the documentation properly PC World are part of DSGi LTD and as such there warranties are the same as Currys which I happen to know a little about. You can cancel your PAYG PC Performance agreement at any time, there is no tie in even if you've claimed, the one and only restriction on cancelling is if there is a repair in progress, then you cannot cancel until it is complete. If you wish to cancel your warranty you can so by ringing 08445 616263 or through your bank directly by cancelling the direct debit. Even if you pay upfront for the 5 year or 3 year warranty these can still be cancelled at any time and you will receive a full refund in the first 45 days (providing you haven't claimed) or a pro rata refund thereafter or before 45 days if you have claimed. The blind hatred people show for these companies who are churning out products at next to cost price to compete with the internet amazes me, has anyone considered that they were not being 'scammed' but instead offered the chance to take a full solution. Are MacDonalds 'Scaming' you when they ask you to go large everytime, are ASDA scamming you when they ask you if you want a bag for life at the checkout evertime? Believe it or not sales people who I am acquainted with are trained and offer the solution for a customer if that means the product on its own thats great but more often than not customers are leaving without the things they need because they read articles like this and think that everything they are offered is a scam. I good example is anti-virus, everyone is trained to think that to pay for anti-virus is a 'scam' "why pay for it when I can get it for free off a mate/from the web/off the back of a truck" what they fail to realise, as there PC's are being data mined and used for DDOS attacks by botnets, is that the guy telling them their PC now requires a restore at the cost of £30 was the same one telling them that free anti-virus wont potect them fully only 2 months ago when the laptop was purchased. The anti-virus that could of been had for the princely sum of £30 now is £60 due to being purchased separately, Since you thought you were being scammed your now having to pay £90 to get your laptop working again, so that sales guy really tried to have you over by saving you £60 in the long run didn't he?
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09 February 2010