Shop Talk

Retailers, consumers and prices

New options for extended warranties

September 19, 2008

If you’re tired of pushy salespeople who try to convince you to spend hundreds of extra dollars on an extended warranty when you buy a new appliance or computer, alternatives are emerging.

fridge.jpgMany consumer advocates have urged against buying warranties, citing concerns about costs and difficulty in making claims. But now, companies such as SquareTrade and are hoping to profit by selling extended service plans for appliances and electronics online at lower prices.

They are hoping to take business away from big-box retailers such as Circuit City and Sears.

Warranties “is one of the last bastions where retailers can make enormous margins to make up for the fact that they are selling items close to cost or below cost,” said Steve Abernethy, CEO of SquareTrade, which partners with some sellers on eBay to offer extended warranties.

With these new plans, customers don’t have to make a snap decision about a warranty at the cash register, but can buy coverage online after making the purchase., owned by credit monitor Experian, is offering an extended service plan that allows consumers to register an unlimited number of electronic and appliance purchases for a flat fee of about $10 a month, for a maximum of three years. Its service plans cover a wide range of small and large appliances and electronics that cost up to $5,000.

dellcompute1.jpgSquareTrade sells individually priced plans on its Website. Abernethy, the CEO, says SquareTrade warranties typically sell for about 40 percent less than what retailers charge. He also said his company will either fix a product in five days once a claim is filed, or refund the price of the item to the customer. But consumers must sign up for SquareTrade’s warranty within 30 days after buying an item.

Eric Arnum, editor of newsletter Warranty Week, says and SquareTrade services are innovative, but added he expects product manufacturers as well as retailers to eventually offer similar contracts. Banks and even phone companies might someday hook up with warranty underwriters to offer plans, he said.

“The barriers to competition are much lower than one might think,” Arnum said. “There will be competition, and I think it will come from some very strong brand names.”

Would you buy an extended warranty online?



Great story. I wanted to let your readers know about a new online warranty service to enter the industry,

For about $.66 a day or $19.95 per month, offers repairs for built-in microwaves, refrigerators, washers, dryers, dishwashers and stoves, no matter how old. There are no contracts; the consumer can cancel without any qualms.

Here’s what you get:
With 24-hour customer service by calling 1-800-552-6031, the All Six Service Plan provides the following benefits:
• Protection for all makes and models of major appliances—regardless of age
• Repair coverage that never runs out as long as you are enrolled
• Coverage for appliances in any type of residential property
• Replacement coverage for appliances that cannot be fixed*

To learn more, log on to


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