When you shop this holiday season, the biggest sales pitch may come at check-out. Shoppers are expected to spend over a billion dollars on extended warranties and service plans. Salespeople push it because retailers make a lot of money with them, in many cases much more than they can make selling actual products.
In a Consumer Reports survey, two thirds of shoppers reported efforts by sales staff to sell them an extended warranty. And one in eight in that survey bought the warranty. But CR continues to say that extended warranties are "notoriously bad deals".
In its December magazine, CR says "some repairs are already covered by the standard warranty... it's "data show that products seldom break within the extended-warranty window", and "when items do break, the repairs, on average, cost about the same as an extended warranty." However, Consumer Reports says "buying a computer warranty that extends technical support as well as coverage for repairs might make sense."
Consumer Reports says "some credit cards automatically extend the manufacturer's warranty on anything you buy with them. So check your card's website to see whether that perk is offered and how it works."
Shoppers are also asked to sign up for store credit cards at check-out. Should you? Click here for the pros and cons of store credit cards.