You may not need an extended warranty

Millions of people head to stores each holiday season on a mission to find gifts for their loved ones. After waiting in line to check out, oftentimes customers are asked by cashiers if they would like to purchase a warranty for their gifts, particularly when the items in the cart are electronics or larger gifts.

In one of Consumer Reports’ latest surveys on electronics purchases, 65 percent of in-store shoppers said sales staff had presented a service plan to them. People may not know how to answer when asked about extended warranties. Consumer Reports notes that some retailers push hard to get customers to purchase extended warranties and service plans because they’re particularly lucrative for the retailer. Stores often keep 50 percent or more of what they charge for these warranties.

For the most part, retail industry experts say that consumers do not need added protection on their purchases. According to the consumer advice tech site iMore, the out-of-pocket costs for most repairs on electronics or other items, such as appliances, usually do not exceed the price of a service plan being purchased. And when they do, it’s maybe $20 more.

Some repairs may already be covered by the manufacturer’s warranty, and a service plan will only duplicate coverage. Even though manufacturer warranties may not last as long as they once did, Consumer Reports says that many warranties will cover a product for at least 90 days in full, and some may have longer-ranging coverage.

Consumers should not overlook their credit cards as they pertain to purchase protection, either. Many credit cards will extend the manufacturer’s warranty for a certain period of time. Plus, that coverage is part of having and using the card at no additional cost.

Shopping at stores known to have excellent return policies also can help customers skip service plans. Should the item break, they can simply return it to the retailer with the receipt or other proof of purchase.

Many service plans exclude certain repairs and replacements. Therefore, it is important to read the fine print on extended warranties prior to purchasing one.

Extended warranties may be useful when buying computers or televisions that cost more than $1,500. Some people prefer replacement plans for smartphones in the event the phone is lost or damaged, as these devices can be expensive to replace out-of-pocket.