Why Warranties For Gadgets Are Mostly Worthless

by Sunny Hoi

Many years ago, I was heavily pressured by salespeople at a Future Shop location in Toronto into buying an extended warranty for a Samsung laptop. They spent approximately an hour trying to convince me to purchase a warranty. I understand that their primary ulterior motive was a commission which explained their desperation. They came up with all sorts of reasons for attempting to get me to purchase a warranty, such as the classic “What if the laptop breaks down? You never know”. Nevertheless, I resisted their pressures and refused to buy the warranty. Ultimately, I returned the laptop because I was unsatisfied with the laptop’s display. This particular Future Shop location closed down months later. Therefore, their desperate attempt at convincing me to buy the warranty hints that business there was not going well for them. This article examines the reasons why gadget warranties are mostly pointless.

The majority of gadget extended warranties like AppleCare and ones from extended warranty service providers like SquareTrade are dreadful.

These extended warranties are merely worth it for clumsy individuals who often drop their gadgets or fall on themselves. AppleCare, for example, offers direct technical phone support. Apple has stated that since the company makes the hardware, the operating system, and numerous applications that hence they are typically able to resolve most issues in a single call. Surely it may be reassuring to the potential customer of AppleCare that he or she may be assisted with their problem, but the financial cost may only be worth it for someone who frequently calls in for technical support. But for those who are comfortable enough to search for solutions online and fixing their own issues, paying for an extended warranty can be seen as even more worthless. On the other hand, if you are not limiting yourself to only Apple products, you may be capable of taking advantage of Costco’s member and extended warranty benefits for other Brand products:  “Costco members receive FREE technical support for televisions, projectors, major appliances, computers, tablets, cameras, security camera systems, camcorders and MP3 players” “Costco extends the manufacturer’s warranty on televisions, projectors, major appliances and computers (excluding tablets) to 2 years from the date of purchase if the manufacturer’s warranty is less than 2 years.” The free technical support accompanied by the potential extension of the manufacturer’s warranty is phenomenal. Therefore, Costco’s advantages are nearly identical to AppleCare which also not only extends customer warranties but also provide comprehensive support. The only products excluded from Costco’s warranty, however, are the iPhone, iPad, and MacBook products. But if you’re willing to go for a Windows computer instead of a MacBook, you may be granted an extended warranty for free.

With advancing technologies and increased spending on Research & Design (R&D), gadgets are broadly becoming more reliable. This is irrefutable. Warranty companies not only have the statistics of the likelihood that something in the hardware could actually go erroneous but also constantly remind us that our purchases are at risk of failing. Therefore, the emphasis on risk illustrates that we are clearly living in a risk society: a society where the inevitable will occur and where all risks will bring in huge profit margins for insurance companies.

I make the simple argument that if your product is good then why should I need a warranty? I merely think that if you are tempting me to buy a gadget warranty that you are either seeking a commission, you are too foolish and actually believe warranties make a vast difference in the longevity of a device, or that you were instructed by the business to “pressure sales.” Hence, if you offer me an extended gadget warranty at a cost, I will concur with one or more of three viewpoints just mentioned while thinking that the gadget is indeed unreliable.

I have owned several electronics. iPhones, iPads, MacBooks, other well-known brand products like Sony VAIO, and none of them have entirely failed on their own regarding the critical hardware enclosed in these gadgets. I’ve never had a problem with any of them. The only thing I was dissatisfied with was the development of dead pixels on the screen of some of my Apple products, but of course, any warranty will not justify a replacement of the gadget or screen unless there are lots of dead pixels which is typically heavily noted in the manufacturer’s warranty policies.

I have a Sony VAIO that I have owned for more than a decade, and it still works. It runs Windows XP, and it’s just really slow now. The hard drive hasn’t failed yet. And I never bought extended warranties for any of this product nor any other product I have thus owned so far.

But don’t get me wrong. I’m not saying that insurance is bad. In fact, I’m saying insurance makes sense for the important things in life, such as your house and your health. The expenses of fixing either of these things are likely to be colossal. Surely the possibility of a natural disaster occurring and completely demolishing your house is extremely low, but the possibility exists. Therefore, we are inclined to not take any chances since obviously a house is inevitably more significant than a gadget. Insurance companies, salespeople, and corporations know all about risk and they take advantage of it for mere profit. In contrast, repairing your consumer electronics like your phone or laptop is comparatively narrow. We wouldn’t panic in the same way if we were to lose our house to a phone.

Many people, notably the clumsy ones, drop their phones and thus cracking them. In this case, warranties do not look like a good deal at all. Any iPhone owner can simply walk into an Apple Store and get their iPhone fixed for $109. You may have to wait a week, but that doesn’t require an extended warranty. If you purchased AppleCare+, Apple would ask for another $79 to fix broken screens even after you have already spent $99 (USD) for 2 years of AppleCare+. Therefore, your total out-of-pocket costs for a shattered screen is $178. Furthermore, you are only allowed two accidents in the life of your phone. If you are likely to drop your phone, you are probably going to drop it again and again.

UPDATE: As of September 7, 2016: Apple has made some revisions to their AppleCare+ program. You may now be able to get a broken iPhone screen fixed for $39 (CAD). However, we know that there is no such thing as a free dinner. Therefore, some conditions apply. Clearly, we have to pay for AppleCare+ which costs $129 (CAD), and we are permitted two repairs as a result of “accidental damage due from handling”. This illustrates that your first screen repair will cost a whopping $168 (CAD). Your next screen repair will cost only $39. Since you still have to pay to get your screen replaced the second time after paying for the first time and the warranty, it makes more sense to just buy a good protective case for your iPhone and adhere to good habits of not dropping your phone. Another stipulation imposed is that the screen can not have any additional damage, excluding the screen damage. If you happen to also damage other parts of your phone when you drop it, or it is bent in any way, good luck getting a new screen. And these $39 screen fixes are actually considered to be in the same category as the more intensive repairs (priced at $129 each) AppleCare+ only covers up to two of either variation. Thus you may very well be in trouble if something more severe happens to your device. This is particularly a concern for those that already used two ADH claims to repair their shattered iPhone screens. And the fact that you still have to pay to get your phone fixed after buying an extended warranty is atrocious. This is even more hideous when the salesperson, not limited to AppleCare+ warranties, try to trick you into thinking repairs are free. But business is all about making profits. At a closer glimpse, this revised warranty doesn’t seem such a good deal now, right?

The new AppleCare+ legal terms and conditions under 3.2 Accidental Damage from Handling for the iPhone specifically are:

  • Under AppleCare+ for iPhone, you will pay a $29 (U.S.) dollar (CA$39) service fee plus applicable tax for a Screen-only ADH Claim or a $99 (U.S.) dollar (CA$129) service fee plus applicable tax for All Other ADH Claim.
  • “For iPhone Screen-only ADH Claims, the Covered Device must have no additional damage beyond the screen damage, including, but not limited to, bent or dented enclosure, that would prevent Apple from replacing the screen on the Covered Device. Covered Device with additional damage will be charged at the price of the All Other ADH Claims fee.”

Free protection from credit cards or home insurance: It appears that many people, even the most brilliant individuals, forget that we may already have free coverage. For example, American Express extends the original manufacturer’s warranty by one year if you paid for your item with that credit card.

The tale of the 17-inch MacBook Pro: My aunt brought in her 17 inch MacBook Pro (now discontinued) to the Genius Bar. The issue with the laptop was that one of the keys on the keyboard needed to be replaced. The “genius” replaced one of the keys and showed us the laptop. He told us to check it and make sure there we were satisfied. I just looked at the key and made sure the laptop was working since my aunt was in a hurry. It was on and functioning. Later, I found out that this “genius” created a way bigger problem compared to the initial one which seemed to be nothing in comparison. When you closed the laptop, the Apple logo still lits up, and the screen does not go to sleep. This was just ridiculous. The genius later admitted that it was his fault, but later recanted what he said and denied any responsibility. He was unable to fix the issue he created, and someone else had to fix the mess he left. And the laptop was in its final days of its limited warranty. Obviously, my aunt wasn’t going to purchase an extended warranty after this time wasting and unapologetic “genius”.

The important message here is that you shouldn’t think or treat a warranty as a luxury. Because it simply isn’t. The warranty is unlikely to save you, but may make things easier for you and give you peace of mind. Being able to allocate responsibility onto someone else so they can deal and hopefully fix the issue swiftly is one big reason for the consumer to buy the warranty in the first place. It’s the same thing as hiring a lawyer. You transfer your worries and responsibilities onto another individual so you can perhaps sleep better at night. But of course, this doesn’t always happen. In the case of the 17-inch MacBook Pro, the “genius” created more worries for us and lacked any sense of responsibility and skill required to perform the job. He wasted our time which we can’t get back and reduced our confidence in the servicing and reliability component of AppleCare. And the incident questions us the true abilities of these “technical” workers. If he couldn’t simply replace a key on the keyboard, what else could he fix? Conceivably, a more complex problem in a computer would result in him messing up even more. I understand that people make mistakes in life, but denying that it was his own fault after he initially said it was his fault merely portrays him as a dishonest and vain individual.

Whether you decide to get an extended warranty or not for your gadget is a choice that you need to make. You will likely be pressured to purchase one from a salesperson, but remember to weigh in the cons and pros before making your final decision. Just make sure you read and understand the fine print/legal terms and conditions before making your choice. For me, an extended gadget warranty lacks merit since I’m extremely caring when it comes to my gadgets. I never drop my devices, never.

Related Posts