Many shoppers are wasting their money on warranties for cameras, washing machines and other expensive goods, a new report has warned. As these warranties can cost almost half the price of the product being bought, the report - by ECC-Net, a group of EU consumer watchdogs - has urged people to be vigilant before buying them.
Consumers often run into problems getting products repaired or replaced - even though they have a warranty, according to the report, which also found that shoppers were being misled about the benefits of these so-called guarantees.
Warranties are offered by many retailers to cover the cost of repairs or replacements should a fault arise with a product after it has been bought. Typically, the more expensive the product, the more expensive the warranty.
Although some warranties are free, extended warranties can often cost €100 or more. Such warranties typically last for between one and five years. The longer the warranty, the more you can expect to pay for it.
As you are already covered for faults under EU law when you buy something, warranties can be of little, if any, value. Under Irish law for example, you are entitled to redress for faulty or defective products for up to six years - and you don't have to pay for that right. This six-year redress period is longer than what many of the so-called 'extended warranties' offer redress for. When you take that six years into account, "one needs to question whether paying an amount [for a warranty] usually close to the value of the item covered is value for money", said the report.
Furthermore, a warranty is no guarantee that you will get redress. The ECC-Net report highlighted a number of cases where consumers ran into problems here.
For example, in May 2013, an Irish consumer bought a laptop from a British-based online retailer. The laptop developed faults on a number of occasions and each time the consumer contacted the seller to resolve the problem, it insisted on the repair being carried out by the manufacturer. After two unsuccessful repairs, the consumer said he had lost confidence in the product and asked the seller for a refund.
The seller insisted on having the manufacturer repair the product. The consumer then contacted the Irish consumer watchdog, ECC Ireland. "The trader was contacted and eventually replied asking for copies of technical reports issued by the manufacturer after each unsuccessful repair attempt," said the report. "Once those were provided, the trader agreed that the consumer could send the laptop back to it for a full refund."
When selling a warranty, retailers often confuse the protection it gives with that already provided for free under the law, according to ECC-Net. This has led shoppers to wrongly assume that they can only rely on a warranty should they run into problems with a product - and not on their statutory rights.
The report also found that warranties are often unclear. Seven out of 10 did not tell consumers how they would return a faulty item to the seller. Four out of 10 warranties were unclear as to who was actually providing the warranty.
Some warranties can be useful and getting one for free is no harm if you are happy with the quality of the product you are buying. However, even free warranties should be treated with caution, as they could be the reason you choose one product over another - and the product without the warranty could be the better one.
"A warranty can make a product seem more appealing," said Grace Duffy, communications officer with ECC Ireland. "It can be bit of extra security for the consumer."
You should read a warranty carefully - and understand the consumer rights you already have - before you buy it. A warranty that covers defects on a product for longer than you are covered for under consumer protection law could be worth buying for example. So too could a warranty which does not put the onus on you to prove the existence of a defect - particularly after six months of buying the product.
Warranties that offer a replacement while something is being repaired can be worthwhile - as might those which set out a procedure for returning items that need repair (otherwise, the retailer may try to get you to pay for the shipping costs when you send something back). Warranties that cover repairs in your home can be useful if you are buying white goods - or something from abroad.
Warranties usually have a long list of things which they don't cover, such as damage caused by improper storage, pets and children, sand and battery leakage. So check what is - and what is not - covered by a warranty.
"We have come across warranties for electrical products which might cover hardware - but not software," said Ms Duffy. "If you are being charged for a warranty like that and it doesn't cover major faults, you need to consider whether it's really worth buying it."
Accidental damage by a consumer is usually not covered by warranties.
"It is sometimes difficult to see the added value of warranties, especially when damaged caused by the consumer or accidents is not covered," said ECC-Net in its report. "In some cases, excessive evidence is requested from the consumer before applying the warranty - such as proving physical injury if a phone was broken during an attempted theft. Or the consumer might have to provide an expert opinion regarding a defect - at his own expense."
Remember all this the next time you get the hard sell on a warranty.