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THE HOYOS FILE: The God argument for extended warranties


Pat Hoyos

THE HOYOS FILE: The God argument for extended warranties

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“Only God is perfect,” said the saleslady, explaining why her store offers extended warranty contracts.
I was then schooled in the religious philosophy that illuminates the imperfect nature of mankind and all the things we make compared with the perfection of the Almighty.
I must admit that it was a good comeback to my assertion that I did not want to pay for said extension to the one-year warranty which came with the product.
After being told that, who knows, threads could unravel, legs could suddenly weaken, and so forth, I had played the conspiracy theory card, as in, “Oh, I see, you arrange with the people who make these things that on the day after the first year is up, everything starts to fall apart so that you can charge this extra money.”
Clearly a stupid argument on my part, because the whole point of these contracts is to get money for nothing by instilling fear in you when there is really very little likelihood that something is going to go wrong that you can claim for under the warranty (note the phrase “that you can claim for . . .”).
“Of course we don’t,” she intoned sweetly, “but, you know, only God is perfect. Things can happen.”
In a way, I do commiserate with the pleasant Bajan salesforce who have to sell these contracts. These things are not for fire and other perils, as you can attach your appliances and furniture to your home or business premises insurance policy after you receive them. And my sympathy definitely does not extend to the aggressive salesmen at the big box stores in the United States. They watch you examining everything without lifting a finger to help you make your choice, and only approach you after you have selected an item.
Then they come over with the sales pitch about buying a service contract. This seems to be where they earn the bulk of their commission, given the obvious annoyance they exhibit when you say a firm “no thanks”.
These contracts mainly exist to extend only one thing – the store’s profit margin on the item you have bought. There is so much competition out there that almost every item you buy for your home or business is now just another commodity, and so the margins are tighter than ever.
Marketing promotions, advertising, and givebacks of one kind or another all add to the overhead, so financing and extended warranties help build back some of the lost profits.
Why I do have a bit of sympathy for the nice people who have to try to sell you these add-ons is that they are also the ones selling you the products. It is not like your insurance company acting as a third party in case something happens to your car, which they didn’t sell you.
So the salesperson with a conscience finds himself walking the fine line between touting the comfort and happiness which will descend on you and your family by purchasing these items for the home, and then, as soon as you have decided to buy something, they have to bring up God.
Your comfort and happiness may go on forever or it may only last a year, they must inform you. It would be so much wiser for you to buy this extended warranty/service contract –  look, just give us some more money in case this beauty actually turns out to be a lemon, okay?
You want to say, “Wait, I thought your store only sold good quality merchandize?”
Talk about a thin grey line. As noted above, we are not talking about covering fire, storm or flood. Nor are we talking about damage caused if you keep slamming the fridge door or if your kids keep treating the living room settee like a trampoline at the Olympics. Nor are we even mentioning the wear-and-tear caused by normal human usage of the product. None of these things are covered.
And if there is a breakdown, it will not be you who determines whether the problem is covered under the warranty: it is the people who sold you both the item and the contract. They are the judge, jury and executioner (more likely, the non-executioner).
Given that these warranties cost around ten per cent of the price you are paying for the item, I ask you: is it really worth it?
God only knows.
• Pat Hoyos is a long-standing journalist and publisher of the?Broad Street Journal.

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