When Carole Sargent bought a $300 Hewlett-Packard All in One printer/fax machine/copier last year from Best Buy at Potomac Yard, the salesman pitched a $99 three-year "performance service plan," and she bit.
"Three more years seemed generous for only a hundred bucks," says Sargent, who had concerns the combo office machine for her Alexandria publishing agency, A Word in Time, might be prone to problems. And it was. After a year, it didn't align ink cartridges properly and wouldn't make photo-quality prints.
But her extended warranty covers such things, right?
Sargent thought so. She took the printer back to Best Buy in March for repair. After three weeks, a service manager told her they couldn't find anything wrong. Oh . . . and she owed $24.95.
"Best Buy has a nifty way to make $25 without actually doing anything for it," Sargent says. "If they can't figure out what's wrong with your printer or copier, zap! You owe $25 . . . [and] your equipment will still be broken."
Best Buy spokesman Jay Musolf says that when technicians can't find the problem, the warranty does not cover the service cost. It's in the fine print section along with repairs the plan doesn't cover, such as damage due to spilled liquids, insect infestation, misuse or abuse, and unauthorized fixes.
"We do not cover 'no fault found' diagnosis. That means that a customer is charged a $24.95 fee to cover standard costs for shipping and diagnosing products," Musolf says, explaining that the policy discourages unnecessary repairs. "Frankly, it's not a common occurrence, because the vast majority of items brought in as defective can be diagnosed as such."
Robert Krughoff, president of the Consumers' Checkbook, a nonprofit magazine that rates products and services in this and other metropolitan areas, says there are reasons other than the fine-print gotchas not to buy extended warranties.
"It is almost always a bad idea," he says. "An extended warranty is insurance. You buy life and health insurance so you are not devastated in catastrophes. Probably this would not be a financial catastrophe if you had to buy another multi-purpose printer or pay out-of-pocket to have it repaired."
Consumers who usually buy extended warranties on electronics and appliances usually end up spending more than they would to repair or replace those products, says Krughoff. And the warranties often require that you have repairs done at their choice of repair shops.
"You'd like to go to a place that is likely to get it right," he says.
In the current issue of Washington Consumers' Checkbook, which ranks area computer repair businesses, Best Buy "didn't rate very highly," he says. Only about a fifth of the 207 Best Buy customers surveyed rated six local Best Buy stores "superior" for doing work properly, and overall performance. A third gave Best Buy thumbs up for letting them know the cost.
David Heim, a deputy editor at Consumer Reports, the magazine published by the nonprofit Consumers Union, says, "Most of the time an extended warranty isn't worth it," because so many products aren't worth the price and hassle of fixing them.
"If it breaks and a repair is going to cost you more than half what a new one would cost, just go ahead and buy the new one," he advises. "Certainly that's true for a $49 CD player or an $89 inkjet printer."
There are two exceptions. "Laptop computer repairs are really expensive," he says, "and treadmills, because of their size and weight, are a pain in the neck to get repaired and our testing showed some durability problems."
But he and Krughoff warn consumers buying extended warranties to look for "fine print exclusions that cheapen the coverage."
Sargent says even though the store manager waived the fee after tiring of her "fuming and fussing," she thinks retailers should point out what's excluded from coverage before the customer buys a warranty. Her salesman didn't. "Is it really worth $24.95 to alienate a customer?" she asks.
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