display | more...

An option avilable for purchase at additional cost when aquiring major appliances. Essentially, insurance against equipment failure. The retailer sells you this insurance in the hope that you will forget you purchased it or lose the documentation recording the warranty so that they may make maximum profit from its sell.

Actually the retailer probably doesn't much care whether you lose the documentation or not. The whole genius behind the extended warranty can be seen by looking at the bathtub curve. When you buy that new TV at Best Buy it'll probably fail in the first month you have it or it won't fail until ten years or more in the future. By selling you a warranty that covers years two and three of your ownership they're covering the time in which the product is least likely to fail. Basically whether you remember that you have it or not the extended warranty is almost pure profit for the retailer. The moral of this node being this, don't buy the extended warranty.

Log in or register to write something here or to contact authors.