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Blog: Hardware No, I Don't Want Your Product Replacement Plan
Brandon Hill (Blog) - March 6, 2007 7:40 PM
Print E-mail del.icio.us 36 comment(s) - last by Tanclearas.. on Mar 26 at 8:11 PM

"You sure you don't want the Product Replacement Plan?"
Taking care of business!

Today, I found a deal on an HP OfficeJet 7410 wireless printer for $324.95 - $125 mail-in rebate. So I decided to check to make sure that my store had it in stock online first. My local store didn't, but a store 30 minutes away had it in stock.

So I drive there, looked around and couldn’t find it. I ask a guy on the floor and he says that it has been a hot item today and says they have two left. I ask for one and he brings it and puts it in my cart. Then it starts:

Salesman: You sure you don't need any paper, any inks? You know these come with starter inks.
Me: No. I don't need any paper and I don't need any inks. **True, I use my laser most of the time.**
Salesman: You sure you don't need a USB cable?
Me: No, it's a wireless printer, don't need a USB cable.
Salesman: You can get the Product Replacement Plan for $69.95, it'll cover you for two years.
Me: No, don't need it. I don't buy PRPs.
Salesman: OK, have a nice night.

I get up to the counter and the first thing the cashier asks:

Cashier: Do you need any extra supplies with that?
Me: No.
Cashier: Do you want the PRP?
Me: No.

At this time, the store manager scurries over when she hears "no" to the PRP.

Manager: You don't want any ink?
Me: No.
Manager: You don't need a USB cable?
Me: It's a wireless printer, I will be printing wirelessly and I don't need a gold-plated $25 Belkin USB cable
Manager: Well you're GOING to need to purchase the PRP.
Me: I don't need it and I don't want it.
Manager: You know this only comes with a 1-year limited warranty. The printer is $324.95, the PRP is a great investment at $69.95.
Me: The manufacturer's warranty will have to do. As a rule I don't buy PRPs no matter what. I just don't do it.
Manager: If this thing breaks within a year, you're not going to get any help from the manufacturer.
Me: I'm sorry, I do not want it.
Manager: Pfff, you'll be back in here in a year with a broken printer whining to us.

She then walks off clearly annoyed and the cashier completes my transaction. How many times do I have to explain myself? She was clearly shocked and amazed that I said no to the PRP, but after the first couple of “nos,” she should have gotten the hint. No means no.

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bad attitude.
By danskmacabre on 3/7/2007 8:18:16 AM , Rating: 5
quote:
Manager: Pfff, you'll be back in here in a year with a broken printer whining to us.


If I got that attitude, I'd put my cash back in my wallet and tell them where to stick their printer.




RE: bad attitude.
By Spivonious on 3/7/2007 9:41:42 AM , Rating: 2
Yeah I'd be like "oh, well I'm not going to buy a printer that will break in a year" and walk out the door. "Salespeople" like that do not deserve my business.


RE: bad attitude.
By glennpratt on 3/7/2007 2:31:16 PM , Rating: 2
Ding ding ding.

Oh so your trying to sell me a piece of crap, huh?
I'll go to a store that sells printers that don't break in one year (unfortunately for us, this store doesn't exist.)


RE: bad attitude.
By zsouthboy on 3/7/2007 11:06:59 AM , Rating: 4
I would've personally stabbed the manager in the face, at that point.

Then I'd find a stack of the RFID stickers that make the door scanner go off and stuff them into the stab wound, his anus, between the sole of the shoe and the heel, and then set the whole place on fire.

But, I have strong feelings on the subject.


RE: bad attitude.
By johnsonx on 3/7/2007 8:02:45 PM , Rating: 2
quote:
...and then set the whole place on fire.


LOL! nothing like a little extreme customer complaint!


RE: bad attitude.
By peldor on 3/8/2007 9:05:48 AM , Rating: 4
The customer is always right. The arsonist, well, maybe not always...


RE: bad attitude.
By Flunk on 3/7/2007 12:49:20 PM , Rating: 3
At that price, without a PRP they aren't making anything on your sale (they could even be losing money) might as well buy it anyway to stick it to them more.


As I used to be one of those salesman..
By lwright84 on 3/7/2007 12:28:07 PM , Rating: 3
I really don't empathize with you at all.. except when it comes to the immature and unacceptable attitude of the store manager. Your experience, while perhaps slightly annoying, was nowhere near catastrophic.

People who don't buy PRP's has a "general rule of thumb" are extremely ignorant and closed-minded. Depending on the PRP being offered, they can actually be a huge value to the consumer.

For example, when I worked at CompUSA, we offered PRP's and service plans (TAP) on nearly everything in the store except software and perishables (blank media, canned air, etc). Some of them were straight-up worth the money (no-questions-asked replacement or store credit for 2 years), and others weren't (repair warranties on products with lifetime manufacturer warranties), but some had special value to the specific consumer (computer repair plans that also included in-home setup, wiring, and installation as well as free upgrade installations and preventitive maintenance for the duration of the plan).

When your on the other side of the coin, you learn real quickly who the knowledgable folk are, and who the ignorant pricks are who will be back in the store purchasing a replacement product or demanding that something be done in their favor. For example, I had many people come in and purchase a Seagate HDD which come standard with a 5 year manufacturer warranty. The polite customers who know this are usually the ones who jokingly point it out and deny the PRP.. even listening to my rebuttals of the fact that our PRP is not "limited", it is not "repair", it is an in-store replacement. As a salesman, I can walk away from that situation knowing that I can confidently tell my frantic boss, who is worrying about "numbers" and "margin", that I've done my job to the best of my abilities.

It is the closed-minded (both customers and salespersons) who make this exchange difficult and unpleasant. A salesperson who doesn't know the PRP's backwards and forwards is setting himself up for failure when he tries to pitch it to customer with even the slightest amount of apprehension. Likewise, a customer who refuses to listen to the presentation of a PRP is setting himself up to be annoyed, frustrated, and upset by the whole ordeal. Keep in mind that the salesperson's job is reviewed on the numbers they produce.. everything from total amount purchases under their salesperson code number, to the average margin, to the number of PRP's sold, and so on and so forth.

My recommendation, as a person who has returned from the dark side and is currently nothing more than a consumer, is to ask questions about the PRP and have a certain amount of knowledge about the limited warranty the product itself comes with. For example.. CompUSA's laptop repair plans also include screen and battery replacements. How much does a new shiny Sony LCD cost? How about a new battery? The PRP's on smaller items and accessories are an in-store swapout plan that lasts for two years. I've seen external hard drives that only come with 90 days limited repair warranties. When purchasing a system for your retired parents.. do you really want to deal with the additional hassle of installing the system, repair and maintenance for 3 years, virus removal, etc.. etc? Find a plan that covers those bases for you and be done with it.

Of course a lot of this is relative to the individuals involved and should be taken with a grain of salt, but the point is that a stubborn and closed mind (from either side) benefits no one including yourself.




By supaflydaddyc on 3/7/2007 12:56:49 PM , Rating: 2
I bought a nice new Sony laptop from a CompUSA not too long ago and was suckered in to an overly expensive two year PRP. I found I could get a four year plan from Sony for less than the two year plan cost me at CompUSA.

I went to CompUSA to return the PRP. You would have thought that the sky was falling. The manager was called over, their best salesperson in the store at that time was called over, and so ensued a 20 minute discussion on why I should keep the PRP.

Eventually, they gave me a HUGE discount on the PRP and I kept it. Like you said, an LED display and a battery on a Vaio laptop are no joke when it comes to cost of replacement.


By kristof007 on 3/7/2007 1:24:55 PM , Rating: 2
Thanks for the insightful response. I'd rate you up but I already posted before I read your lengthy but informative post.


By Brandon Hill (blog) on 3/7/2007 2:06:12 PM , Rating: 4
You know what, it shouldn't even be an issue. I told the manager no and she kept hassling me. She should have just backed off. Stop wasting my time with your pushiness and let me get on with my business.

If I tell you no multiple times, stop getting in my face and getting militant b/c I turned you down. It's not a way to run a business.

I've never purchased a PRP on any product and probably never will. I swap out peripherals so fast that it makes no sense. I don't keep tech items much longer than 6 months (with the exception of my HP LaserJet 4000tn which is almost ten years old... the toners are dirt cheap and you can't kill the thing).

Laptops I keep on average 6 months, AIW printers on average about 5-6 months before I trade it in and get something else. I always toss the old stuff on eBay and recoup most if not all of my original costs.


By peldor on 3/8/2007 9:18:40 AM , Rating: 2
PRPs are poorly priced insurance. So poorly priced that salescritters are forced to hock it constantly as it's virtually pure profit.

Honestly lwright, you're completely brainwashed here.

Use a credit card that gives you an automatic extended warranty if you need more protection.


By bigboxes on 3/9/2007 9:45:26 AM , Rating: 2
Sorry lwright84, PRP's are for people that think with their heart and not their mind. Those that have trouble rebooting their computer. Retailers sell them (and push them) because they make $$ on them, not because they save the customer time and money. The store's profit margin may be quite small on many items, especially those that are on sale or are loss leaders (products designed to get you into the store in order to sell you other higher-margin products or add-ins to boost sales). It's not closed-minded to not want to pay another 20-33% just to get a warranty that should already be there. I figure most electronics should last at least a year (the normal warranty period). If it lasts longer then it's a bonus. The product usually becomes obsolete after 2-3 years and would be replaced anyways. PRP is just another name for insurance. Insurance is not in the customer's best interest unless the amount to replace the product is more than the customer can afford (think high cost products such as cars, homes, etc.) Even then it's not about the customer, it's making more $$ off them.


By CorrND on 3/9/2007 11:27:59 AM , Rating: 2
Why would CompUSA sell extended warranty plans that are actually a financial benefit to the consumer? That makes no sense to CompUSA's bottom line. They MUST be making a profit on these or they wouldn't sell them.

I understand your point that some plans are better for the consumer than others, but this is like Vegas gambling logic. Sure some games have better odds than others for the player, but no matter how small the margin, ALL games ultimately have the odds stacked in favor of the casino.


By Tanclearas on 3/26/2007 8:11:43 PM , Rating: 2
Anyone that could possibly try to argue for PRP's is definitely brainwashed. The "odds" are undeniably stacked in the store's favour. If you purchased PRP's (even just ones that you think are "worth it"), you will ultimately spend more money than if you just pay to replace the one item that actually does fail.

Save yourself some money and just don't buy them. Not buying them will cost you less in the long run. Period.


hah
By Anh Huynh on 3/6/2007 8:25:32 PM , Rating: 3
When they ask me if I want the extended warranty, I just tell them it'll be replaced or upgraded before the factory warranty expires. They shut up and let me pay.

On a side note, Circuit City tried to sell me a scratch replacement plan when I bought a music CD...it was 99-cents. I asked them if anyone bought it, the sales person was hesitant and said it was great for people buying CDs as gifts....




RE: hah
By Le Québécois on 3/6/2007 10:25:46 PM , Rating: 2
quote:
scratch replacement plan


Good one...

It reminds me of that time when a salesman at FutureShop tried to sell me a extended warranty for a GameCube controller extension cord... At least you get a good laugh for free when that happens.


RE: hah
By Belegost on 3/7/2007 12:26:25 AM , Rating: 3
If a salesperson starts getting pushy about selling the PRP, I always resort to the "Oh, so you're selling me a product of such poor quality that you expect it to break. I think I ought to shop somewhere else then" line. It's amazing how quickly the threat of lost sales quiets them.


RE: hah
By viperpa on 3/7/2007 1:46:13 PM , Rating: 2
I hate pushy sales people. They think your to dumb to know what's good for yourself. Some of those store warranties have so many restrictions they are worthless. Your just paying for the paper it's printed on. Reminds of Circuit City that sells worthless warranties.


RE: hah
By exanimas on 3/7/2007 4:28:58 PM , Rating: 2
Even worse than pushy sales people, are the ones who flat-out lie about the service/replacement plans. I work in the repair section of Best Buy, and I've had countless people come in with broken things (for instance, a camera that was clearly dropped or fell into water) and the person says "Well the sales person said the PSP covers if its dropped or whatever". I feel bad that they were lied to, but not being the one who said that and not being able to do anything about it, I end up being the one to turn them away and let them know they're stuck with a $250 paper weight. Pfft, sales people.


RE: hah
By Nick5324 on 3/8/2007 12:04:51 PM , Rating: 2
Funny you mention this exanimas.

Until about 4 years ago, I shopped at Best Buy almost exclusively IF I was buying something at a B&M store. Leaving out the details, I had previously bought a laptop, and bought the PRP after asking very specific questions on what it would cover. I took it in with a problem that I was told twice at the time of purchase would be covered, and they refused. I haven't bought a single thing at BB since. I'm also someone who family and friends ask for recommendations on consumer electronics; I always start with "the best thing you can do is not buy it at BestBuy...".


RE: hah
By exanimas on 3/8/2007 1:50:58 PM , Rating: 2
I don't blame you the least bit. If someone directly lied to me about something like that I would never shop there again. I usually just tell people any questions they have about PSP/PRPs are answered in the brochure(sp?) itself. That way, I don't even risk phrasing something incorrectly etc. It's unbelievable some of the people BB hires.


RE: hah
By livelouddiefast on 3/8/07, Rating: -1
Extended Warranties
By hemming on 3/6/2007 10:26:13 PM , Rating: 2
I personally hate PRPs from retailers, and they are useless for the most part. Most credit card vendors offer a default warranty extension of 1 year if the original warranty was 1 year. At least my current visa does without having an annual fee.

My second pain with something like this is that HP also offers warranty extensions on a number of product. Sometimes it's expensive, other times it's pretty dang cheap.

Some of the 100-150 doller all in ones have warranty extentions that are upgrades as well. The default standard warranty may require a return to mfg for repair. The hp-branded warranty may upgrade so you get an exchange unit faster and without cost to you (other then a credit card for collateral).

It's all a matter of what you want, and knowing all the options.

I don't get PRPs either, i just make sure I know what I am getting in the first place.

And that time bomb is a lie, even despite what is said here: http://consumerist.com/consumer/hewlett+packard/14...




RE: Extended Warranties
By Hoser McMoose on 3/8/2007 4:38:21 PM , Rating: 2
I'm not sure if this is still the case, but HP's extended warranties also sometimes got you an unadvertised bonus: Different phone support. For at least a while HP's regular warranty support was being handled in India while their "Carepack" (extended warranty) support was handled in North America by the same people that handled the big-$$$ company contracts.

Now, I don't know that this necessarily meant better phone support, but I know this was of value to some people. Dell might have had a similar setup at times (only difference being that last I checked Dell's low-cost support was in the Philippines instead of India.. otherwise pretty similar though!)

Note that I'm not sure if this is true anymore and it was never true for all HP products at all times. Phone support at big companies is pretty constantly being changed to try and get the best price-performance ratio for the various products.


I'll miss CompUSA and the TAP
By 13Gigatons on 3/7/2007 2:37:01 AM , Rating: 2
CompUSA was $24.99 and after 19 or 20 months you could bring back the motherboard/cpu combo or hard drive and get a free upgrade to a bigger hard drive or faster mobo/cpu.

Maybe that's why they went out of business. :(




RE: I'll miss CompUSA and the TAP
By goku on 3/8/2007 4:19:58 PM , Rating: 2
no they went out of business because they're POSs and only sell garbage.. If they actually sold products that didn't fail, these product replacement plans would actually be useful.. Too much sony and HP and toshiba crap that causes people to resent buying in store.


Xbox 360
By kristof007 on 3/7/2007 10:35:11 AM , Rating: 2
I got a product replacement plan for my 360 at the time. Not sure how long it's good for but it seemed like a good deal at $40. You, sir, are my hero for handling those people with great persistence. And I definitely would of considered walking out of there and asking the manager:

"Hey .. you think Staples has this?"




RE: Xbox 360
By wickedwing on 3/7/2007 6:34:50 PM , Rating: 2
I used to work at OfficeMax, OfficeDepot, and BestBuy, and it is absolutely crazy how much of their corporate culture is about selling these plans at any cost, including losing the customer. I was always getting in trouble with management for giving rational reasons to them why people didn't need these plans. Needless to say, I moved on from retail when I could no longer stomach these "Shove the plans down their throats" policies. Now, that's not to say I don't purchase plans now, but I come to the decision on my own, after weight the cost/benefit of the particular plan offered.


DO NOT EVER EVER EVER EVER EVER BUY THESE!!!!!!!
By walk2k on 3/7/2007 10:15:09 PM , Rating: 2
Do you know WHY they push extended warranties so hard?

BECAUSE THEY MAKE BANK OFF THEM!!

999 times out of 1000 you will NEVER need them. Either the manuf. warranty will cover it, or IT NEVER BREAKS!

I can count on one finger the number of computer or CE products that broke down, and it was an Adaptec SCSI controller and I fried it myself while doing a BIOS update and Adaptec replaced it for FREE in 2 DAYS (overnight shipping)!!

#1 Don't buy crap products that break.

#2 DO NOT EVER BUY EXTENDED WARRANTIES!!!!!!!!!!!




By Hoser McMoose on 3/8/2007 5:21:32 PM , Rating: 2
The above is totally correct regarding the reason, it's purely to do with money.

The fact of the matter is that Office Depot made damn near no money off the sale of that printer. Hard goods like that are extremely difficult to make money on. Once you factor in the cost to buy the printer from the distributer, ship it to the store, pay someone to put it on a shelf, pay another person to take it off the shelf and into your cart and then a third person to ring it through the cash, you're already nearly at the final sale price. Once you add in the 2-3% that the credit card companies take off the top of the sales price and basically the store is breaking even on selling you the printer.

Extended warranties, on the other hand, are gold! Stores can make a killing on those sorts of things. If you don't use the warranty then it's 100% pure profit for them, and as the above poster mentioned, most things don't break during their extended warranty period. Even when they do probably only a certain percentage (I would guess less then 50% for most small to mid-priced items) are going to USE their extended warranty even if they are covered.

Accessories are always very profitable too. Most stores probably make more money selling a $25 USB cable then they do selling a $375 printer. It's a similar story for paper, ink, and other trinkets.

And it's not just the computer/business supply stores where this applies. I used to work in a ski store a while back. We made a bit of money selling top of the line skis when they first came out, but the real profit for the store was in selling things like goggles, winter coats, boot bags etc.


Careful...
By bravacentauri83 on 3/6/2007 8:13:18 PM , Rating: 2
They may have hidden a self destruct switch in your printer ready to go off exactly one year from your purchase date. :-)

The only time I've ever purchased a replacement plan was when a friend of mine worked for Best Buy. He was able to get a 4 year plan for dirt cheap when he purchased my iPod for me. Other than that, I don't bother with it.




By BaronRasta on 3/8/2007 2:36:11 AM , Rating: 2
I used to work for a major electronics retailer. As a general statement to anyone I would say don't buy these PRPs, PSPs or whatever marketing name has been applied to make the sales pitch seem more attractive to the widest possible audience. The only exception may be if you work for the company and know how to use the system to your advantage (and of course you probably only pay 50% of the retail cost).

To say that there is pressure within these corporations to sell the warranties is an understatement. As an employee you will either sell the warranty or you will find yourself working in an environment which is hostile to such a degree that you will decide to move on. The propaganda machine, which on a daily basis sells the concept to the employees who in turn sell to you, is very refined. Contests are created, a variety of slogans are adopted, sales aids are prepared and during harder times employees may be counseled on a per sale basis. Did that customer take the smoke? What happened? Did you overcome objections? You'll get the next one.

As a point of interest, about a year into working for the organization sales people were discouraged from referring to the service plans as "smoke". Perhaps the word reflected the dirty nature of the product. The phrases "Smoke and mirrors" and "Blowing smoke" come to mind.

Are these people naturally immoral? I don't believe so. The pressure comes from above and filters down. Store managers and stores themselves will be ranked based on sales to be sure, but to be a respected "box", warranty sales are the key. In turn, the ranking of an employee is heavily dependent on warranty sales.

The obvious reason for this phenomenon is money. The market is so competitive that when it comes to the sale of computers and associated peripherals the margins have shrunk to minuscule amounts. Attach and warranty sales are the easiest ways to increase profit.

Typically accessories have a margin of 20% to 50%. Selling a USB cable for $19.99 knowing the actual cost is $3 felt like stealing. Although you will notice a sales person is far more interested in selling the service plans. During one of the numerous "debates" with management a newly promoted manager let slip a piece of information which I had often suspected but still find hard to believe. I had insisted that if I was given various statistics regarding usage and associated costs of the warranty program I could possibly stomach the though of selling the "product". Quickly and under his breath the store manager informed me there would be no sense in providing such information as the actual cost to the corporation for managing these plans was around 3%. Undoubtedly, this information was never to be shared outside of the top management circles. I suspect this figure may be failry accurate considering employees can purchase warranties for half price and are typically paid 15% of the contract price if they are commission based.

In general, a box (one store) should run around 7-8% of total sales as warranty. When this number falls thing can get ugly. I may be misquoting the figure but I believe the online stores run 3.5%-4.0%. Apparently the pressuring customer to buy is reasonably effective.

Remember that when it comes to selling warranty anything goes. Apologies can be offered to irate customers after the money is safely in the coffers.

Just say no to extended warranty. You'll probably have to say it more than once though.




...
By Derka on 3/8/2007 8:52:36 AM , Rating: 2
I get it all the time from Ebgames people




By Revenant Enforcer on 3/9/2007 12:36:58 PM , Rating: 2
I have worked at several major retailers. It's all pretty much the same. I can't blame any of the employees for attempting to sell it to you simply because they are mandated to do so at the risk of unemployment. When I worked at CompUSA if you didn't have a certain percentage, they would drop you to a minimum wage cashier position.

A decade ago, the Warranties were about 1/10th the price of the product and lasted roughly five years. Today, they are often 1/3 the price of the product and last as little as two years. They try to make it seem like you get all these value added services such as "in store setup" or a "starter" kit. But the truth is, that most consumers, even the computer illiterate, are more then capable of setting up their own computer. Moreover, the supposed value of having a tech come out to your home to unbox your system costs the store approximately 1/10th of the cost to the consumer.

It's not to say I haven't received some value from a few warranties. My father bought a screen protection plan on his laptop which he had to use not once, but twice. That was certainly worth the cost which at the time was $300 on a $3000 laptop. But now the same program goes for well over $800.

If you go to a retail outlet, your going to have to expect them to try to attach accessories and warranties to any sale due to the low margins on the merchandise itself. If you want to avoid this, then the best option is to purchase online. Vote with your wallet. (Which judging by CompUSA's recent troubles, consumers are doing.)




By livelouddiefast on 3/8/2007 3:00:43 AM , Rating: 1
I work at office depot as one of the lowly tech salesmen. PPPs are usually the worst part of the job. I can build up such good rapport with a customer, and then they lose all faith in me and what i've said after i offer that lousy plan... Not lousy in that it doesn't help people if they need it, but lousy because they could be a lot cheaper.

Most of us salesmen that are just having a job through college are pretty understanding. When retail becomes a career, then you find your throngs of corporate whores trying to get as many ppps and as much market basket as possible so they don't get a mean email from their district manager.

Another gripe... go back and tell them you can get the exact same plan plus a 10 foot gold usb cable and paper and cable ties for 64.99 (which is a much better deal considering those 'special' gold cables sell for like $30 normally. Cost to company: $8 roughly)... i don't know WTH they were trying to sell you with a $70 plan. You really should complain about treatment like that... especially by a manager. Use that form on the bottom of the receipt.

Go to the depot when they have good deals on products, buy your accessories elsewhere.




"The whole principle [of censorship] is wrong. It's like demanding that grown men live on skim milk because the baby can't have steak." -- Robert Heinlein











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