Imagine: FREE warranty/service plan with any purchase - would it be profitable?

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BustaUppa

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A topic that stirs up much emotion on these boards... the constant hounding of sales reps, convincing you that the store warranty for a product is a wise and necessary purchase. There are those of us that scoff at these reps, those of us that begrudgingly end up buying the service plan; even a few that buy it and then end up being glad they did.

Well I am of the opinion that it is fundamentally wrong to force this extra decision upon the customer. I'm not sure how feasible this is, economically speaking, but I think a store ought to offer a warranty and service plan free of charge. Have your receipt? Then that's your warranty right there.

I know warranty sales are big business right now, so by ignoring this I'm sure a store loses potential revenue. But what about the goodwill it creates toward customers? Customer perception can be important, and I think that by being famously customer-friendly, a store could go far. I know I'd love to buy stuff at a place like that. So in the LONG run, think that such a policy could lead to profit?

I'd be curious as to what you all think. Would this be feasible? Profitable? Discuss!
 
Not feasible. Most stores cover their purchases up to 30 days anyway - beyond that you have to deal with the manufacturers or if you bought an extended warranty you could look to the store for relief if something goes wrong. If the store were to have a blanket warranty on everything they would face the wrath of morons everywhere who want their stuff replaced for little or no reason at all...
 
First thing that came to mind is Sear's Craftsman brand of tools.

Buy a Craftsman tool, if it breaks, return it for a replacement. No questions asked, in my experiance.

It works for Sears, with that ONE particular brand of tools. But EVERYTHING that an electronics store sells? I dunno if it'd work out financially. However, considering the ONLY tools I'll ever buy is Craftsman, due to the warranty... it MIGHT work for Electronics stores.
 
ok... i work at Sears in the Tool department, it does not work out... b/c you have schumks that like to bring back rusted sockets, god awful broken up everything.... if everyone would read on the back of the package, it says due to manufacture's defects, a defect is not rust, that's not the manufacturer's fault, but let it be known we do take back all kinds of tools, except powered anything, those only have a one year warrenty

Arghhh.... i just wanna vent.... that's why this is so mixed up...

but please be courteous... when bringing back tools..... cause we arn't all mechanics and some of us don't like getting grease all over us when were at work....

thanks
 
To an extent, most items do have a warranty, from the manufacturer, anywhere from 15 days to 1 year or more.
The only reason the extended warranties/service plans are pushed so hard is because they're almost pure profit. If they had to pay out on 90% of the warranties, they sure wouldn't be pushing them.
I don't necessarily have a problem with someone trying to sell me the plan. Offer it to me, answer my questions, then shut up and leave me alone about it.
Customer perception/opinion is important, but a lot of places don't seem to think so anymore, so they focus on 'angels' and screw the devils. That's their choice, but it can come back to bite them.

I agree being famously customer friendly would be great, and I would pay more for excellent customer service/friendliness. But free extended warranties aren't the way to do that, i don't think. The only benefit to the store is that most warranties aren't needed, so it would be a low-cost giveaway for them. But high-income beats low-cost in most cases.
 
[quote name='imamario02']ok... i work at Sears in the Tool department, it does not work out... b/c you have schumks that like to bring back rusted sockets, god awful broken up everything.... if everyone would read on the back of the package, it says due to manufacture's defects, a defect is not rust, that's not the manufacturer's fault, but let it be known we do take back all kinds of tools, except powered anything, those only have a one year warrenty

Arghhh.... i just wanna vent.... that's why this is so mixed up...

but please be courteous... when bringing back tools..... cause we arn't all mechanics and some of us don't like getting grease all over us when were at work....

thanks[/quote]

Sears used to be cool about their tools! A few years ago they started new policies. Like having a receipt, which I kindof understand. But on a tool with a "lifetime warranty", I don't have receipts from tools bought 10 to 20 years ago. So no more craftsman tools for me! Home depot will honor craftsman tool warranties without the receipt and trade for their brand.
 
[quote name='wubb']Doesn't Costco have something like this that covers everything outside of computer systems?[/quote]If that is the case, than that is pretty interesting. Isn't Costco once of those places that requires a paid membership to shop? That's an interesting compromise then... only take paid members as customers, but then offer crazy service to everyone in that group. Maybe Best Buy could do something similar with people who buy those silly gold cards or whatever they are.
 
[quote name='BustaUppa'][quote name='wubb']Doesn't Costco have something like this that covers everything outside of computer systems?[/quote]If that is the case, than that is pretty interesting. Isn't Costco once of those places that requires a paid membership to shop? That's an interesting compromise then... only take paid members as customers, but then offer crazy service to everyone in that group. Maybe Best Buy could do something similar with people who buy those silly gold cards or whatever they are.[/quote]

So you'd rather pay to be part of a group that gives you extended warranties rather than opting to pay on a purchase by purchase basis?

Personally I'd rather not be paying more for a CD I pick up just to get an extended warranty.. but thats just me.

Now.. if Best Buy's special people got their own special registers near Christmas.. I'd be all over it.. goddamn hour long lines.
 
[quote name='BustaUppa'][quote name='wubb']Doesn't Costco have something like this that covers everything outside of computer systems?[/quote]If that is the case, than that is pretty interesting. Isn't Costco once of those places that requires a paid membership to shop? That's an interesting compromise then... only take paid members as customers, but then offer crazy service to everyone in that group. Maybe Best Buy could do something similar with people who buy those silly gold cards or whatever they are.[/quote]

If you buy in quanitites (food, toilet paper, etc), Costco, Sam's , BJ's (snickering) cards are worth it. But not much good for other things, but for new release video games (usually $5 less than other stores). There are usually some perks to buying from there like extra features on a item, or bonus accesories.

I think my $36 Sam's membership saves me about $400 - 500 a year, and I don't buy that much stuff. Not too mention no problems with returns.
 
[quote name='Cornfedwb'][quote name='BustaUppa'][quote name='wubb']Doesn't Costco have something like this that covers everything outside of computer systems?[/quote]If that is the case, than that is pretty interesting. Isn't Costco once of those places that requires a paid membership to shop? That's an interesting compromise then... only take paid members as customers, but then offer crazy service to everyone in that group. Maybe Best Buy could do something similar with people who buy those silly gold cards or whatever they are.[/quote]

So you'd rather pay to be part of a group that gives you extended warranties rather than opting to pay on a purchase by purchase basis?

Personally I'd rather not be paying more for a CD I pick up just to get an extended warranty.. but thats just me.

Now.. if Best Buy's special people got their own special registers near Christmas.. I'd be all over it.. goddamn hour long lines.[/quote]I never said I'd rather do it that way. I'm just theorizing about all the options here. The fact is, BB does have a limited "membership" system in place right now, so I wonder what would happen if they extended the current system to include some sort of warranty benefits.
 
I get my Costco membership through my gf's work for $10 a year total (we each get a membership for that $10) and consider it to be borderline worth it. But that's just me.

We get large packs of 4 or 5 different food items that are a good bit cheaper at Costco than other places. But if you do the math lots of their food items are not much reduced at all (or sometimes actually a bit more) than they would be at Wal-Mart or a super market. We also get TP, paper towels, paper plates, and solo cups there. And their food counter is pretty cheap, too.

It's funny as most of the time we'll be in there getting maybe one box of trail mix bars and a pack of paper towels while everyone around us will have those massive carts filled to overflowing with everything imaginable.
 
[quote name='wubb']I get my Costco membership through my gf's work for $10 a year total (we each get a membership for that $10) and consider it to be borderline worth it. But that's just me.

We get large packs of 4 or 5 different food items that are a good bit cheaper at Costco than other places. But if you do the math lots of their food items are not much reduced at all (or sometimes actually a bit more) than they would be at Wal-Mart or a super market. We also get TP, paper towels, paper plates, and solo cups there. And their food counter is pretty cheap, too.

It's funny as most of the time we'll be in there getting maybe one box of trail mix bars and a pack of paper towels while everyone around us will have those massive carts filled to overflowing with everything imaginable.[/quote]

Proof that our society thinks that huge quantites of items are always a value.

Looking at it, some of the small items in big quantites are a savings, though some of the other items, no, they're not.

I piggyback on my GF's Costco membership, and on the simple staples like TP, paper towels, and personal hygiene items, yes, they're a good value. For some of their other items, look before you buy.
 
[quote name='dwsscs'][quote name='imamario02']ok... i work at Sears in the Tool department, it does not work out... b/c you have schumks that like to bring back rusted sockets, god awful broken up everything.... if everyone would read on the back of the package, it says due to manufacture's defects, a defect is not rust, that's not the manufacturer's fault, but let it be known we do take back all kinds of tools, except powered anything, those only have a one year warrenty

Arghhh.... i just wanna vent.... that's why this is so mixed up...

but please be courteous... when bringing back tools..... cause we arn't all mechanics and some of us don't like getting grease all over us when were at work....

thanks[/quote]

Sears used to be cool about their tools! A few years ago they started new policies. Like having a receipt, which I kindof understand. But on a tool with a "lifetime warranty", I don't have receipts from tools bought 10 to 20 years ago. So no more craftsman tools for me! Home depot will honor craftsman tool warranties without the receipt and trade for their brand.[/quote]I may have some reason for this. When I worked in the world of Pawn Shops we would have regular customers wo would search our misc tool bin for broken craftsman tools that we would sell for little to nothing. They would then return them to Sears for a new piece and would then resale it for a huge profit.
 
Free does not equal Profitable...

They could do a 'buy 4 games' with purchase and get a 1 year warranty promo or something... but FREE - no go.
 
[quote name='shrike4242']
Proof that our society thinks that huge quantites of items are always a value.

Looking at it, some of the small items in big quantites are a savings, though some of the other items, no, they're not.

I piggyback on my GF's Costco membership, and on the simple staples like TP, paper towels, and personal hygiene items, yes, they're a good value. For some of their other items, look before you buy.[/quote]

One thing in particular that isn't much of a savings are the double packs of cereal (one large box with 2 big bags of cereal inside). I haven't priced them for several years, so it may be different now (doubt it) but those double packs of say Cheerios are quite a bit more expensive than picking up the boxes at either Wal-Mart or on one of the sales all supermarkets seem to have once a month or more. Actually Wal-Mart is cheaper every day than your average supermarket sale (they are better than 2 for $5 on the 15 ounce size, IIRC).
 
doesn't wal-mart carry something like popular mechanics brand tools now that have a lifetime warranty? I wonder how well they honor it?
 
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