Slashdot Mirror
Do You Buy Extended Warranties?
Stackdump asks: "I am a college student (senior seeking CS BS). I work partime at Best Buy selling computers (arg!). To be truthful I don't really sell computers; I sell what we call 'performance service plans' or PSP's for short. This is the somewhat gimmicky name given to Best Buy's extended warranties. To be fair they do actually provide some service in the store, swapping HDs, CDROMs, and so forth, but most of the hardcore repairs are done elsewhere or by the manufacturer. Prices range from $99 on the cheapest tower to $249 on laptops over $1000. Terms of service are pretty simple everything is covered against power surge, dust contamination, whatever... BUT abuse is not covered: so slam a pencil in your laptop and say byebye, but fry your computer because you don't have a surge protector and you can get a new one. As this is the central pre-occupation of my work day I ask the Slashdot community this: do you feel these warranties are really worth the money?"
No, they aren't worth it. They are a tremendous profit margin for Best Buy, which is why you even get a commission (which you failed to mention) for selling them. The high pressure sales tactics some people employ to push these things thoroughly sours my shopping experience in what should be the equivelant of my toy store. They are much like rebates, they are great for the vendor because people usually don't collect on the value they purchased. It's all a statistical formula at the end of the day. It does appeal to a specific market segment and demand, or else no one would buy them.