Target rips it’s customers off too, sells electronics warranties

Posted October 18, 2006 at 08:33 PM by Adam Berger

Section: Tech News, Audio, Computers, Gadgets / Other

I have heard, though don’t hold me to it, that second party electronic warranties from places like Best Buy, Wal-Mart, and Circuit City are the biggest ripoffs you can find. If you search around the web a bit you will see horror story after horror story of people who tried to claim problems with electronics products at these locations based on their warranty and ended up enjoying a nice runaround and no resolve. I am a firm believer in not purchasing these offerings, a good warranty is when it is directly from the manufacturer and is the only time to buy the extra protection.

As you can expect retailers don’t appreciate my thoughts, between cables and warranties these big box companies are able to stay in business and continue to offer lower shelf prices. Target is next on the list, taking a cue from their competitors by offering extended service warranties. Beginning this month, Target is rolling out three-year service warranties on electronics — including televisions, digital cameras and laptop computers, ranging from $19 for products under $200 to $79 for those $1,000 or more.

Analysts have speculated that Richfield-based Best Buy and Virginia-based Circuit City derive at least half of their annual profits from service contracts, according to some news reports. Neither electronics retailer discloses that information. But in fiscal 2006, Circuit City reported that $422 million of its $11.5 billion in sales came from extended warranty revenue. But Target will be a latecomer to competition for service warranty sales in the estimated $132 billion-a-year consumer electronics industry. Wal-Martlast year began selling two-year service plans on televisions and computers, while electronics specialists Best Buy and Circuit City have had extended service warranties on electronics for years.

One distinctive feature of its warranty program, Target said, is that customers will be able to apply a sticker to their electronic devices that gives them a number to call when they need repair service, even if they’ve lost their product receipts.

Read [Twin Cities]