CEO, Interrupted: Extended Warranties – what’s your take?

by Matt Rutledge

Woot is researching Extended Warranty partners and offers for specific products as an add-on or post-purchase offer for members. If you have an opinion share on this topic (and I hope you do), please take a minute or two to scan over my own (mostly negative) notions on extended warranties below:

I was shocked a year or two ago reading a well known consumer advocate magazine to see a serious recommendation that folks should consider buying extended warranties for notebook computers.

Essentially, the blurb said, the high value, repair frequency and high cost of potential repair can make the insurance a reasonable bet. I had always enjoyed vigorously turning down extended warranty offers whenever pitched at the time of purchase and I regularly cringed in agony when a family or friend told me how “good” they felt buying an extended warranty for their car or latest gadget because it was going to be “protected now.” I proudly followed a strict line of thought that extended warranties were for suckers and put them in the category of things that subsidize lower pricing for the rest of us.

However, it didn’t take me that long to begrudgingly accept that the logic behind this new advice was sound, especially as intended for the majority demographic of the magazine. It was annoying to have to accept an exception to a rule I enjoyed being a smart-ass about, but then again might regular warranties be shortened and product complexity increased to the extent that this advice would grow even more valid? I filed a mental note to myself that this was an area to watch, as gadget convergence of course continues and more things become expensive, complex and impossible for consumers to repair like the notebooks this advice was based on.

Like many of you, I’ve gone through several notebooks over the years, now plastic baggies full of disassembled useless parts, due to some hardware glitch, hard drive failure that I never fixed, or some hack I half-attempted before giving up and upgraded to a newer, faster model. I have a closet full of junk too disassembled and broken to even throw in a bag of crap. Certainly thousands of dollars spent. Occasionally I might feel a bit wasteful in my consumerism but then again I’m sort of supporting the faster evolution of computing power by upgrading quicker, right?

All in all, I still feel like extended warranties are not for me yet. Some combination of not being able to come full reverse on my original analysis, my guess of the profit margin generally involved, or just that the future thought of trying to get warranty service is too depressing to consider at time of purchase. But, I have come to understand that I’m a higher risk-taking consumer than many of my family/friends and my time value may not apply to them. I no longer react quite so vigorously negative when offered or cringe when I’m told someone I respect splurged for an extra/longer support option.

I’d love to hear Wooter opinions as we balance options. We receive regular requests for warranty offers via email and in the forums—if that was you, now’s the time to speak up.  Defend your requests! Are there items that Woot might sell from time to time such as TVs, notebooks, gadgets where you believe that extended warranty purchase is a logical buyers choice? Is it based on the cost of the item? How about extended warranty on refurbished items? What are your thoughts on appropriate cost of an extended warranty in percentage terms for 2 or 3 year coverage?

thanks for your support
matt

previous entries:
CEO, Interrupted: Crowdsourcing Hot Deals
CEO, Interrupted: LiveShopping aka Worldwide Wooting
CEO, Interrupted: Take your protein pills
CEO, Interrupted: Snapster’s unfortunate alter ego