Money-back extended warranties have a catch

Retailers offer credit if you don’t make a claim, but watch for the traps.

  1

by

From the June 2013 issue of the magazine.

  1

appliance_0411_322
Sales clerks in retailers like The Brick, Visions Electronics and Sears are offering what sounds like a sweet deal: pay for an extended warranty on a purchase, and if you don’t make a claim, you’ll get back the amount you paid for the warranty when it expires. But unfortunately, it’s not that simple.

You’ll have to be attentive because often you have only 90 days after the warranty expires to claim and spend your refund. You don’t get cash, but you will get a credit, excluding taxes. Some retailers, like Sears, let you use the credit only on a new purchase that is twice the value of the credit, so you’ll need to spend $200 to use a $100 credit. Other restrictions may apply on which type of products you’re allowed to buy. In most cases, you’re still better off turning down the sales pitch for the extended warranty, a service that is hugely profitable for retailers.

One comment on “Money-back extended warranties have a catch

  1. That sounds like Sears is bordering on deception. NOT good for Sears. Sears will get in deeper hole than where they are now. Smarten up Sears. Thanks to Money Sense.

    Reply

Leave a comment

Your email address will not be published. Required fields are marked *