Tuesday, January 4, 2011

Caveat Emptor: May the Buyer Beware--2. Is it a Warranty or a Sales Device?--Electronics



"Sitting Justice",
a blindfolded woman
holding a sword and
a scale upon which to weigh truth,
rests on a throne
in an 18th Century engraving.








For many, these are indeed "leaner and meaner" times, a phrase popularized by Former President George HW Bush in the latter 1980's. Unfortunately, the trend to de-regulation in business has stimulated new versions of greed in business. One of the most harmful to the consumer is the use of a "warranty" primarily as a sales device.

The warranty is a guarantee a product or service does what it is purchased to do. Or, if not, the consumer will get a refund or a replacement that does work at the expense of the business. Sales of cars and trucks, major appliances, electronics, and other expensive items, even automotive repairs, depend on consumer confidence in the product, and the store to provide a working product or service. Purchases are purchases, of working items or services, not donations.

Today, a warranty may be an empty promise.

"Pure profit" warranties are sold by some electronics stores. In these warranty plans, a separate vendor or affiliated company, not the actual seller of the product or service, "warranties" the item. The buyer drops down a chunk of cash or credit only to find that the product manufacturer warranties the item for the first year, the store warranty does not apply until after the manufacturer's warranty expires.

Take the example of a computer buyer. After paying for a one-year warranty, the computer does not work very well or at all, after the 14-day easy return period. Often the consumer simply has not found a helpful instruction manual or has not had the time to get the computer "up and running" in the first 14 days. The buyer, confident any problem will be resolved under the warranty, takes the product back to the store.

The repair technician tells the consumer the problem is hardware, not the software covered under the warranty, and that because the manufacturer warranty covers in the first year, the customer will have to call the manufacturer and probably send the computer to the manufacturer for repair or replacement.

The cost of the warranty increases with the cost of the product. The buyer of a low cost computer has dropped about $149.99 for a useless warranty, will lose use of the computer by sending it to the manufacturer, who is totally unknown to the buyer.

If a manager does decide to offer a new replacement, the customer "uses" the $149.99 warranty to cover the stores' defective product. So the customer is told he or she must buy a second $149.99 warranty for the replacement computer.

Often the seller has a repair department. But later the customer finds but it is not a manufacturer factory-authorized repair department. The "other" electronics store, which does have a factory-authorized repair department, does not want to do a free repair for the electronics store down the street which received the money for the computer and the warranty.

So, despite the warranty, the buyer is stuck with a defective computer, even after buying the warranty.

In the computer industry, this can be complicated by having purchased a "used" computer sold as "new". The more experienced customer knows to check computer files for evidence of a "used" computer, in the store if allowed to do so, or within the easy return period, only 14 days in many electronic stores.

[Read more on the topics raised in "Caveat Emptor: May the Buyer Beware" on http://monthlynotes.thirteen.blogspot.com (http://monthlynotes.blogspot.com) on www.google.com.]

Email mkrause54@yahoo.com or mkrause381@gmail.com to comment or request copies of this or other blogs posted by mary for the monthlynotesstaff on http://monthlynotes.blogspot.com.

Graphic: Sitting Justice, in "Law and Politics": A Cross-Cultural Encyclopedia, DP Strouthers, ABC-Clio, Santa Barbara, CA, 1995.

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