Consumers Find Extended Warranty Shopping Painful

There really is no end to the disappointing experience consumers must endure to shop for new electronics and communications products. In signs of a new low, Wall Street Journal reporter Ron Lieber finds that it's impossibly difficult to even determine if the service designed to reduce your purchase risks is a good deal (Will Your New Toy Be Reliable?, 1/14/06). As with every other aspect of shopping for new fangled gadgets and internet access service plans, the consumer is reduced to performing Herculean contortions in order to make a good decision. Consider these facts from Ron's article:

• 50 cents of every warranty dollar is windfall profit for the retailer
• Not all warranties cover advice needed to make a product work as advertised
• In-home repairs are not standard
• Consumers may have to pay their own shipping for repairs
• Some warranties overlap the period covered by the manufacturer
• Prices for comparable coverage can vary by up to 50%
• Coverage terms are unique to each program and obscure risk reduction comparisons
  

All this confusion for the one product/service meant to make you more relaxed and confident in your purchase! It's really about category profit for the retailer isn't it? When does the consumer genuinely come into the equation for these retail businesses? It really is remarkable - and sad - how far "price obsessed" communications and consumer electronics retailers in the U.S. have strayed from consumer-friendly business models.

The only comforting realization is that the pendulum always swings both ways in power struggles. One day soon the consumer will simply vote with their wallets, and stop beating a path to crummy shopping experiences to save (albeit illusory) a few dollars on their next purchase. Eventually, a new consumer electronics and communications services retailing model will emerge. And the old incumbents will go the way of Woolworths, KMart, Sears and the rest!