Blog: Excellent Alternatives to the Extended Warranty Ripoff

by Reads (39,471)

Buying an extended warranty always feels like a scam, especially since you are left without any tangible evidence of that extra charge. All you get is slight peace of mind from a flurry of what-ifs. Sales associates spring the warranty on you at the register; you are suddenly forced to look into the future and consider your personal levels of coordination and general ability to have nice things. The sad fact is, many aren’t far from scam territory as the reality of extended warranties is that they involve deductibles, conditions, tricky wording, and a laundry list of exclusions.

Costco Concierge ServicesFor example, if you decide to purchase an HDTV from Best Buy, it will run you $129.99 for a two-year extended warranty plan, increasing in cost up to $219.99 for 5 years. Accidental damage is not covered in this purchased plan; the warranty section of Best Buy’s website vaguely references damage from handling, but when I looked into it further, it was not listed as covered in the fine print. It’s confusing at best and intentionally misleading at worst, and if I’m going to pay extra to protect my purchase, I shouldn’t need a lawyer to understand what I’m buying.

What I did gather from reading the policy, is that I would be covered if something happened to the device due to dust, software, hardware, or if its complete lemon. But, if something is a lemon, why would it even be sold? Why should I have to pay to be protected by shoddy workmanship? Seems like it should be a given that when I’m buying a finished product it will work, and if it doesn’t, the company will take responsibility for it.

The Westinghouse Fiasco

In fact, even without an extended warranty, most manufacturers cover basic repairs that result from device failure within the first year of purchase as part of the basic manufacturer warranty. In April 2011, none of this was on my mind when I was in the market for a 32-inch HDTV with basic features, a crisp picture, and a price tag less than $300. I shopped around a bit and walked down aisle after aisle of HDTVs blasting the Palladia channel. Finally, I settled on a 32-inch Westinghouse LED HDTV at Costco; it looked good and the price was right. I hadn’t heard much about the company and after doing a little research I saw mixed reviews, but went with it because it had the specs I was after and the price was right.

Westinghouse 32 inch LED HDTV

The unit was great for a while, but after about a year, the picture became distorted, which eventually led to the screen completely blacking out. By October 2012 it was unwatchable, so I called Costco’s Concierge Service (similar to the Geek Squad at Best Buy). A helpful representative walked me through some trouble shooting, set up a case number, and handled everything over a three way call with Westinghouse. I was more than pleased; the representatives were personable, friendly, and most importantly, patient.

Westinghouse sent the Return Merchandise Authorization number, and I was told to package the TV up and ship it to their warehouse; they would either repair or replace the unit within 5 to 7 business days. Easier said than done; especially since I had tossed the original box a while back. Then the holidays came, time flew by, and the RMA expired.

When I went to get in contact directly with Westinghouse to request a new RMA number, I was met with extreme waiting times, busy signals, and a limited time frame to contact customer service during business hours. They were also closed on weekends and every single holiday imaginable (all the while Costco remaining open). After four frustrating phone calls where a customer service representative from Westinghouse hung up on me, yelled at me, falsely promised someone would call back, or sent my call into an eternal loop of ringing or voice mails, I was pretty sure I was up a creek without a paddle, or functional HDTV.

At the time, Westinghouse even had a warning on their website alerting of long wait times, and a Costco rep informed me that they were having trouble getting through to Westinghouse as well. A quick search online revealed other desperate shoppers, most of whom had purchased lemon Westinghouse products over Black Friday and the holidays, vehemently expressing their frustrations.

Westinghouse Logo

I could write an entire separate article on each phone call alone, but for reference, check out Westinghouse’s customer service rating on CustomerServiceBoard, where they currently hold one star, 36 negative, and zero positive reactions.

After spending two weeks waiting for an elusive call back I never received, Westinghouse sent an email checking in to make sure the issue had been resolved; oh, and claiming that they had attempted to call five times with no response. That was news to me, and I responded with two emails, both explicitly stating my dissatisfaction with the service, that I had not received a single call, and letting them know that the issue had not been resolved. All the while staring at a  32-inch black box. More days went by, and I still had not received a reply to either of my emails and I had not received a phone call.

Costco to the Rescue

Eventually I remembered, with actual excitement , that I had called Costco’s Concierge Service in the first place. To be honest, at this point I didn’t even think it would be under the terms of my service for them to help me out. After all, they had gone this far and put me in Westinghouse’s hands, all for free, but it was worth a shot.

A representative immediately got to work and had Westinghouse on a three-way call. The call was great, I’d liken it to having a mediator present at divorce proceedings; Costco steered the conversation and I was finally told I could return the TV for a full refund. This seemed almost too good to be true after months spent fighting a one-sided battle with Westinghouse in vain. My first questions were would I be refunded in cash and would I have to buy another Westinghouse TV? I was assured I would be given cash, and there were no restrictions.

Costco arranged a check in call to ensure Westinghouse had sent the Return Authorization, which they stated would be sent to my email. Two weeks passed and I received nothing; Costco followed up, on a Saturday no less, and scheduled a call to Westinghouse for Tuesday, when their customer service would be open again. When the time came for the call, Costco wasted no time getting Westinghouse on the line, this time putting me on hold. A Westinghouse representative had falsely claimed that the RMA had been sent February 1, but to Costco’s escalation department, not my email as they had originally stated.

12w00001-membership-card-gold-starI started to lose hope when the Costco service rep told me a manager from the escalation department would have to call me back, but she couldn’t promise me when I would get a call. Costco had not let me down up until this point, so I just went with it, and I still had a feeling that the rug could be pulled out under me at any minute.

However, within seconds after hanging up, my phone rang, and the manager for the Costco escalation service was on the line. He told me they had not received the RA from Westinghouse on February 1, but that they had just received a new one minutes earlier. He scheduled the return for me, letting me know I could now bring the TV back to any Costco of my choosing, and they would refund me on the spot.

I imagine the manager felt a bit like a pop star running into his biggest tween fan, as I thanked him over and over again; praising him, Costco, and every other representative I had spoken to. I have absolutely no idea how I would have gotten through to Westinghouse without taking years off my life and wasting precious time that could be spent watching a TV that worked.

That Friday, I walked into Costco, TV in hand along with the remote and power cord, and was handed cash for the original value of the TV, a year and a half after I purchased it. I headed straight over to Costco’s entertainment department, and picked out a brand new TV. I’ll admit that there was a nice-looking Westinghouse 32-inch LED HDTV, but unsurprisingly I decided to go with another brand this time. The best part of the entire experience was getting a new TV for $219.99, $60 less than I originally spent almost two years ago. (Pro tip, if you are planning on getting a 5 year warranty on an HDTV at Best Buy, you might just be better off buying a second HDTV from Costco as back up.)

Garbage Warranties

iphone square tradeExtended warranties are mostly garbage. It seems as if the more you pay, the less is covered. For example, take the Verizon Wireless insurance plan for the 16GB iPhone 5. You will pay $240 over two years ($9.99/month), but if that phone breaks, you still have to pay a $169.99 deductible to replace it. Alternatively, the day I purchased my iPhone 5, SquareTrade was offering a special on it’s normally $99.99 warranty for $75 to cover two years with accidental damage from handling and a $50 dollar deductible. Also, although it varies between providers, some insurance companies will let you cover the cost of replacing electronic items under home insurance or apartment insurance for no or little extra cost.

While there are certainly cheaper alternatives to the standard warranties offered by stores like Best Buy and Verizon, with Costco Warehouse, I never had to consider an extra cost and was treated as though I had purchased a premium warranty. With every television, projector, and computer purchase, Costco extends the manufacturer’s warranty to two years from the date of purchase, and many credit cards do the same, assuming you use the plastic to purchase the device. Also, for any purchase spanning from cameras, to routers, to pressure washers, Costco offers free technical support between 5am and 10pm (PST) 7 days a week, excluding major holidays. You get all of this, just by paying your $55.00 yearly membership fee.

For comparison, if you want to get tech support from Best Buy you will pay a one year membership fee of $199, and it won’t get you 64oz Heinz Ketchup bottles and a month’s supply of individually packaged organic chicken.

I felt confident buying another HDTV with Costco having my back, and I would look to them again for any other gadget whether camera, notebook, speakers, home entertainment systems, and more. Outside of the warranty, their prices are typically competitive, and in many cases lower. The level of customer service I experienced, at no extra cost, seems like a gift these days; but I can guarantee as long as Costco keeps it up, they have my business.


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4 Comments

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  1. Jamison Cush

    Extended warranties and high-priced cables… that’s how the BestBuys of the world make money. Glad to see there are decent alternatives out there, and that Costco is one of them. I might buy my next major device there, and pick up a couple of gallons of ketchup to boot.

  2. Jeff Dunn

    “Extended warranties are mostly garbage.”

    And that’s all that has to be said about that.

  3. deeryno

    Costco conchierge service is Costco answer to only offering a 30 day warranty on their computers. All they do is contact Hewlett Packard, for example, and listen. They do not interject unless you do not have a case number, and then all they do is say it. I think they actually put down the phone while you are talking and do other things because I had to say, are you even there a couple of times for them to answer. I had a computer for 35 days and after my computer did an update all of my programs were gone, my Desktop only had a Trash Bin, could not do a system restore or start in any of the F Key functions. So, OK HP offered to fix, sent me a box, sent it back and they had to put in a new mother board. Get computer and it is not even close to being factory standard. Plus it has scratches all over the shiny black part and silver top. Thought, well this sucks, but still said after what I just went through if it even works that would be better than what I had. Install all my programs once again and as I am trying to fix things like clicking on show formats and the screen goes black and monitor (little square icon), black and monitor. The only way I could stop was to turn off manually. Called again and they sent another box and returned it within 9 days and the only thing they fixed according to the paperwork was the chassis (Guess that was the scratches). HP had told me if this happened a third time they would replace. Well guess what, I though maybe rebooting would help and when I did computer said do you want to update and restart. I clicked on that option. When the computer came back once again it did like the first time – all my programs were gone, only the trash bin on Desktop and same message windows/system32/config/systemprofile/desktop location is not available. So I call again only hours after receiving my computer and explained everything again from the beginning. Matthew calls HP to have me talk again, but he said he was going to try and get a replacement as I had gone through enough. HP had just closed 12 minutes earlier. He promised to call me the next day by 8am Pacific Time, since he was on Eastern Standard time. I waited for 3 1/2 hours and nothing. So I called and they give me a supervisor who called HP and only listened, never interjected. The HP guy said he was not authorized to replace it, he could not offer technical support because the problem could not be fixed. He then asked me what else can he do for me? I am perplexed. He kept repeating the same thing and Costco concierge did nothing. Today I filed a complaint with the Better Business Bureau on HP, and am probably going to file one against Costco as well. I paid $1,121.48 for a computer I got to use for slightly more than a month and spent so much of my time on it if I had a gun I would just shoot it. So that is why Costco Concierge is just a front for NO MORE WARRANTY on your products. PS I have been a customer for almost 25 years, and as Costco Concierge pointed out when they asked which case number, there is only 1 and this is it. But they robbed me of my time, my money and quite frankly my sanity in dealing with this, which is quite frankly mind boggling. I will find some avenue to register a complaint against Costco and get them to understand the contract they pay for Concierge service is a waste of money because as customers get this kind of service, they will go to Sam’s Club the next few towns over. Our family and extended family may also cancel our membership. This makes no sense at all.

  4. pkalmonte

    We buy all our technology — computers, printers, televisions — at Costco and have for years due in no small part to the excellent prices, two-year extended warranty and fabulous Costco Concierge Service.