The Extended Warranties Playbook

Mel sent me a link to It seems many folks are frustrated by, among other things, the whole extended warranty scam. For most items you buy, it just doesn’t make sense to buy an extended warranty. One time I bought a $20 shower clock at Best Buy, and the cashier asked me three times if I wanted to buy an extended warranty. After I said no the last time, she rolled her eyes, and said that if I didn’t care then she didn’t care. Hello? The warranty costed almost as much as the damn radio.

I noticed that recommends that folks shop at Circuit City. Allow me to share my Circuit City extended warranty experience…

I went to Circuit City with a friend of mine to buy a computer for her. We did some research ahead of time and had some idea of what we wanted to buy. After we selected a computer, the sales guy rang us up and asked if we wanted to buy the extended warranty. The exchange went something like this:

Me: No, Thanks.
SG: Are you sure? It covers this and that and blah blah
Me: No, thank you.
SG: (Pulls out a few photocopied articles from magazines like PC World and Consumer Reports showing typical repair costs for PCs) Take a look at these articles. The warranty more than pays for itself. (Walks away.)
Me: (I look over the articles. He returns, and I point out that based on the probability of failure offered in the articles, the warranty did not pay for itself.)
SG: Well, if you’re not going to buy the warranty, then I have to get my manager. See, we want every customer who leaves Circuit City to know they have the best product blah blah. (Trots off to get a manager.)
Manager: So SG tells me you aren’t interested in the warranty. That’s too bad. You know I had a guy just the other day blah blah
Me: I’m not interested. Please complete my transaction.

After about 30 minutes of this bullshit, they finally sold me the damn computer. I don’t think any one store has a patent on these practices. Rather, I think it’s part of the business model. Hell, even Kmart took a page out of the extended warranties playbook when they were getting themselves out of bankruptcy. And guess what? It worked.